WPP, Ex-Italy Chief Set for High-Court Showdown

NEW YORK The showdown between WPP Group CEO Martin Sorrell and Marco Benatti, the WPP country manager in Italy Sorrell dismissed in January 2006, will take place in London’s High Court on Monday, according to representatives from both the WPP and Benatti camps.

MindShare Worldwide CEO Dominic Proctor and United Group COO Laurence Mellman are the first WPP execs expected to take the stand, but Sorrell probably won’t testify next week, sources said.

In March 2007, a U.K. court of appeals ruled that WPP’s claim against Benatti for breach of contract could be heard in English courts. WPP, which had filed suit in a London court in January 2006, contended that Benatti violated his employment contract with WPP by disguising a financial interest in Media Club, a company he recommended the U.K. holding company acquire. Benatti countersued WPP in Italian courts for wrongful dismissal, and had appealed against an earlier ruling that said Sorrell’s case should be heard in the U.K.

WPP is seeking unspecified damages as the result of Benatti’s breach of terms as expressed and “implied” in his consultancy agreement with the company. The holding company said it was also investigating him for fraud, and setting up competitive operations, WPP said when the litigation began two years ago.

Benatti has denied any improprieties while employed by WPP.

In his complaint against WPP, Benatti also alleges damage to his professional reputation resulting from media reports about the termination of his employment. Benatti has not publicly said what legal or financial recourse he is seeking.

WPP has denied those claims.

The dispute between Sorrell and Benatti became highly personal, with the Italian executive taking aim at Sorrell. When Benatti filed his counterclaim, he released a statement saying he reserved the right “to extend proceedings against [Sorrell] as [an] individual person due to the immense damage he has personally created by his repeated defamatory statements.”

The dispute began in December 2005, when questions were raised about Benatti after he and Sorrell disagreed over the amount of the earnout Benatti was due as part of WPP’s acquisition of Media Club.

Part of Benatti’s job at WPP was to find acquisition candidates. For introducing the holding company to Media Club, he earned a commission of $247,000, according to sources close to WPP. Benatti demanded an earnout of nearly $11 million, compared to the $361,000 WPP believed he was owed, spurring further investigation, which revealed Media Club was ultimately majority owned by Benatti.

Separately last March, Sorrell settled a high-profile U.K. libel lawsuit, accepting about $236,000 in damages from Benatti and a business associate, Marco Tinelli. Sorrell accused Benatti and Tinelli of generating libelous claims posted on an Internet blog, as well as disseminating an offensive j-peg image of Sorrell with Daniela Weber, WPP Italy COO.

Weber was party to Sorrell’s invasion of privacy action and was awarded $59,000.

The case generated worldwide headlines for its novel digital communications libel claim and its frequently unflattering and inflammatory references to Sorrell.