Western Exec Accuses IPG of 'Scheming' to Defame His Character
By Angela Dawson
LOS ANGELES--Michael Kassan, president and COO of Western Initiative Media Worldwide in the U.S., is suing Western and its parent, Interpublic Group of Cos., claiming breach of contract and defamation of character. Kassan is seeking $63.5 million in damages.
The lawsuit is the latest in a string of recent legal battles that have set the industry abuzz. Others include IPG vs. Marvin Sloves, Helayne Spivak vs. J. Walter Thompson and former Ammirati Puris Lintas CEO Rick Hadala is believed to be seeking damages from IPG over his dismissal.
Kassan's suit, filed in U.S. District Court in New York, alleges that after IPG asked Kassan to sign a new five-year employment contract five months ago, the company attempted to "create a basis to terminate the contract by orchestrating a scheme to ruin Kassan's reputation in the media industry." It claims that IPG has been "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."
Kassan, who at one time was Western chairman Dennis Holt's personal attorney, is currently not licensed in the state of California, but is in the process of trying to reactivate his license. The State Bar of California has a public record of discipline against him on file.
Kassan's action follows an unexpected leave of absence from Los Angeles-based Western and that IPG was conducting an internal audit that coincided with his leave [Adweek, July 26].
Kassan is asking the New York court for $13.5 million for anticipatory breach of contract of the new agreement, which extends from Jan. 1, 2000 through Dec. 31, 2004.
The lawsuit states, "The purpose of Interpublic's scheme has been to force Kassan to resign or devise a pretextual reason to terminate him, thereby, according to Interpublic, nullifying both his current agreement with Interpublic and the new employment agreement."
Kassan, in a statement issued last Friday, also said he has filed a notice of intent to arbitrate before the American Arbitration Association in Los Angeles in which he is seeking damages of $50 million.
Kassan, who technically still works for Western, could not be reached for comment. His attorney, Phil Reiss, also could not be reached. IPG general counsel Nick Camera said, "We will certainly vigorously defend it," but he declined further comment, noting the holding company had not yet seen the suit. Sources said that IPG was not surprised by the legal action.
On July 30, following Kassan's departure, Western issued a statement saying, "Mr. Kassan's leave has no connection whatsoever to his or the company's activities on behalf of its clients."
Since his leave, in mid July, Kassan's office phone number now answers as chief operating officer Mike Lotito's office, and two of his office assistants were put on leave and now work from Kassan's home.
The legal actions follow what sources describe as a power struggle between IPG (and Western's global chairman Larry Lamattina in particular) and Kassan over whether Western should be more fully absorbed by IPG and the future of the $10 billion media buying firm's identity and independence.
In the legal battle between IPG and former Lowe & Partners/SMS executive Marvin Sloves at least two depositions have been taken. IPG general counsel Nick Camera and Lowe chairman and chief creative officer Lee Garfinkel were deposed by Sloves' attorney, Moses Silverman, Camera confirmed.
Expected to appear in the coming weeks: Lowe Group chairman Frank Lowe, Sloves, IPG CEO Phil Geier and Mercedes-Benz executive Michael Jackson, among others. IPG is suing Sloves for $25 million, alleging "breach of fiduciary duty" in the shift of Mercedes' $125 million account from Lowe to Merkley Newman Harty in March.
Also last month, attorneys filed opposing arguments in the suit between ex-worldwide creative director Helayne Spivak and her old agency, JWT. Spivak claims the agency defamed her in a Nov. 24, 1997, Adweek article titled "Overmanaged, Underled," and that she was forced to resign after JWT CEO Chris Jones discriminated against her because she is female. Judge Ira Gammerman has yet to rule on the motions.
--with Andrew McMains
and Jim Edwards