IPG Considers Kassan Countersuit

Western Exec Officially Dismissed; Court Papers Detail 'Scheme" LOS ANGELES--Interpublic Group of Cos. is weighing a countersuit against Western Initiative Media Worldwide's former vice chairman and president Michael Kassan, who is suing IPG and the media firm for $63.5 million, alleging breach of contract and defamation of character. Kassan, meanwhile, received word that he had been fired on Monday, Aug. 16. A countersuit is "not outside the realm of possibility," said IPG general counsel Nick Camera last week. "We're still formulating our response to [Kassan's allegations]," but "certainly counter-claims will be part of the consideration." He declined to elaborate. Also last week, new details emerged about the "scheme" Kassan alleges IPG cooked up to create grounds for his dismissal. In court papers filed Aug. 13, Kassan claims that Western sent him a letter July 14 that put him on a 30-day notice to "cure" alleged breaches in his employment contract. Although the exact charges were not specified (and the letter was not disclosed), it alluded to Kassan's "alleged failure to perform his obligations" in his contract and that he had used "bad judgment" in performing his duties, according to the lawsuit. Specifically, the complaint centered on Western's financial performance dating to 1995. Kassan's suit states that since he joined Western, "Western's billings have increased from $1.4 billion to $5 billion, and its revenues have increased 69 percent." The suit goes on to state that the July 14 letter "complained about events--such as profit margins from 1995--that were as much as five years old, or were approved by Interpublic or others, or which were standard operating procedure for Western's offices. The suit does not detail Western's profit margins that year, however. The lawsuit further states that Kassan was warned he would be dismissed and his existing contract, in addition to a new five-year agreement slated to go into effect Jan. 1, would be voided if he didn't remedy the breaches within 30 days. Kassan then claims IPG made it impossible for him to remedy the problems outlined in the letter. Among IPG's alleged dirty tricks to prevent Kassan from finding the "cure": "Ordering Kassan not to report to his office and not to communicate with Western's clients and employees." "Conducting an 'audit' to search (in vain) for wrongdoing on behalf of Kassan." "Rifling through his personal files." "Removing Kassan's support staff." "Redirecting his telephones to someone else's office." (Calls to Kassan's office have, in recent weeks, been answered by Mike Lotito's office, Western's COO.) "Telling people who called--including his bankers and family members--that Kassan did not work at the company anymore." "Opening his personal mail." "Taking personal faxes to other employees." "Disseminating defamatory statements that Kassan was on an extended leave of absence from Western because of his role in financial misconduct when it knew that Kassan had committed no such misconduct." It also claims that on Aug. 9, Kassan tried to return to his Western office in Los Angeles but was ordered to leave the building and the locks to his office were changed. Kassan's suit claims the July 14 letter was the first time he was aware that IPG and Western were unhappy with his performance. Backing that contention, the suit states that around Jan. 6, Camera signed a sworn affidavit attesting to Kassan's "superlative performance" and his "trustworthiness, honesty and integrity." It also states that in February, IPG insisted on writing Kassan a new contract which would run from Jan. 1, 2000, through Dec. 31, 2004, and "substantially increase his compensation." The context of Camera's statement of praise on behalf of Kassan (as mentioned in the lawsuit) remained unclear. Camera declined to elaborate. Kassan's arbitration action states that Western's chief executive Dennis Holt was not made aware of an IPG investigation of Kassan's office until after July 14, and calls the July 14 letter "a sham designed to set up the termination of Kassan." Kassan's suit claims that IPG is now trying to "extricate itself from its contractual obligations by manufacturing a scenario to destroy Kassan's career and reputation." Kassan's lawsuit was filed earlier this month in U.S. District Court in New York. A separate arbitration notice was filed in Los Angeles. Kassan was notified in a one-page letter dated Aug. 13, which he received on Monday, Aug. 16, that he had been fired. Replacing Kassan as president is COO Mike Lotito, who joined from sister IPG shop Ammirati Puris Lintas last month [Adweek, June 19]. Lotito, who lives in New York, will divide his time between the coasts, sources said. Kassan filed an amendment Aug. 20 to the lawsuit and arbitration statement noting that he was fired. The amendment states that IPG's letter says "Kassan's attempted cure of the alleged breaches of the employment agreement was 'inadequate.'" Kassan, his attorney and Western executives all declined comment. IPG said it received the suit on Aug. 13--the same day it sent the letter firing Kassan--and has until Sept. 2, barring extensions--to respond. IPG was served on the final day of Kassan's 30-day "leave of absence." Separately, Western will relocate its accounting department--30 positions--from Los Angeles to New York, an IPG representative said. The move is designed to "centralize the operations" in New York office, he said.

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IPG Considers Kassan Countersuit

Angela Dawson

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