Former Partner Sues Canada’s Largest PR Group

Today we learned, via an anonymous source, of a motion filed last month against National Public Relations, the self-described “largest public relations consultancy in Canada.”

The suit is being filed by a Richard Zeidel, who was until recently an SVP/partner at Canadian digital agency Sonic Boom, in which National holds a majority stake (the motion calls National “a power broker in Quebec politics”). The RES PUBLICA Consulting Group, respectively, is the parent company of National.

Here’s a copy of the motion:

In short, it accuses the firm’s parent company of using the defendant to better position itself for a pending merger/acquisition and then pushing him out.

Zeidel was hired to help grow Sonic Boom and, according to the filing, quickly discovered that it was actually operating at a loss. The company eventual righted itself, but another problem (allegedly) emerged: RES PUBLICA would not allow Sonic Boom to work with its own clients:

“Sonic Boom was removed from the proposal process of digital and social media services to clients.”

Zeidel, again according to the motion, continued raising concerns about the setup and got fired in the process. The company allegedly “terminated” him “abusively,” reclaimed his shares and refused to pay any severance or outstanding expenses.

Coincidentally, this happened just as National was in final preparations to merge with or acquire Cossette, Canada’s largest independent marketing/ad agency network.

Here’s the primary accusation: “National’s intentional unwillingness to grow equity in Sonic Boom was for the sole purpose of having its shares at a low value,” which would then allow the company to buy back the shares that its partner owned at the lowest possible expense.

The litigant accuses the company of using him to grow the business, then going behind his back to purchase his shares and fire him so that it could proceed with its planned M&A move.

There’s lots of arcane legal language in the document and no clear indication of what, exactly, RES PUBLICA planned or plans to do with the Sonic Boom agency.

But it provides a fascinating look into the politics of agency mergers and acquisitions — and it is not, as of yet, public knowledge.