Former APL Chief Executive Points Finger at Puris and Geier
NEW YORK--Rick Hadala, in a $340 million breach of contract and defamation suit against his former employer, claims that Ammirati Puris Lintas was "in much worse shape" than had been described to him before he took over as North American CEO last September.
Specifically, the suit claims that IPG chief Phil Geier and APL worldwide CEO Martin Puris "failed to disclose" several problems, including:
"Poor relations with General Motors and Unilever (two key accounts)."
"Strained relations between APL (and particularly Mr. Puris) and IPG management."
"Decisions left lingering for months."
"Economic performance would fall dramatically from 1998 to 1999."
Hadala claims he was hired for his "no-nonsense management skills" but that when he "acted decisively to turn things around," he was "wrongfully terminated" on April 5. He is seeking a massive $300 million in compensation and at least $40 million in punitive damages [Adweek, Aug. 23], even though his salary and bonus was only $975,000. The suit says Hadala valued the five-year contract at more than $20 million with the stock and incentive plan.
IPG denies Hadala's accusations. "Obviously, we feel that we complied with our contractual obligations," IPG general counsel Nick Camera said last week. As for "strained relations" between Puris and IPG, Camera said, "I don't know what he's talking about." Puris could not be reached.
Hadala, who worked at Procter & Gamble and McKinsey & Co. before joining APL, spent a rocky seven months as the No. 2 at APL. Many observers pegged the appointment as a bad fit from the start.
Prior to his termination, according to the suit, he was "never advised" that his job "was in jeopardy." He adds that "at two different lunches in late fall 1998," Puris assured him that his position was "secure," and that he was Puris' successor.
The charges of defamation stem from press reports of widespread dissatisfaction within APL, from his colleagues and subordinates, citing Hadala's "abrasive personality," and "often arrogant manner," characterizations the suit claims damaged his business reputation.
The case, pending in State Supreme Court in Buffalo (near Hadala's home) is in the early stages of discovery. No depositions have been taken, but notices have been served. Among those expected to be deposed: Puris and his boss Geier.