Back in February, we learned that the founders of Kitcatt Nohr Alexander Shaw, the independent U.K. agency that sold to Publicis in 2011, were suing Publicis for allegedly misleading them about a failing relationship with P&G at the time.
Publicis purchased the independent agency back in 2011 with the intention of merging it with DigitasLBi’s London office. The acquisition included an earn-out tied to the future performance of Kitcatt Nohr Alexander Shaw, and the agency alleged that Publicis assured them that its relationship with P&G—upon which its future performance was heavily dependent—was strong.
This despite the fact that, according to KNAS’ lawyer, the “impending loss of Digitas UK’s P&G business had in fact been widely anticipated within Publicis and DigitasLBi UK since as early as July 2010.”
Today, Campaign reports that High Court judge Mr Justice Males ruled in favor of the agency’s founders, awarding the claimants £2.6 million (approximately $3.2 million) and finding that Publicis Groupe subsidiary MMS breached the buyer warranty over the 2011 purchase of the agency. Campaign adds that he has not yet ruled on costs, which could add another £2 million. The claimants argue they should have been awarded £3.6 million and reportedly plan to appeal. Campaign notes the discrepancy is related to “the treatment of IT fees charged by Publicis’ internal Shared Service Centre.”
As co-founder Kitcatt told Campaign, this judgment effectively proves that Publicis agencies including Saatchi and Leo Burnett London planned to “take business away from Kitcatt Nohr Digitas.” He also noted that Maurice Lévy didn’t “honour their agreements” and didn’t bother to show up in court either but instead tried to draw out the court case in order to make victory more difficult while “pretend[ing] there was no deal, and pretend[ing] again they knew nothing about the ad agencies’ plans.”
“It’s a massive moral victory and proof that the big guys don’t always win,” wrote Marc Nohr in an email to AgencySpy today. “Things can work out if you do the right thing, as Spike Lee once said.”