Fried, McKay Trade Lawsuits in Wake of Breakup

Former Partner Seeks Resumption of Severance, Payout of Stock
BOSTON–Marvin Fried has filed a lawsuit against McKay Communications and his former business partner John McKay seeking some $500,000 he claims he is owed in severance and stock payouts.
At the time of the breakup two years ago, the agency agreed to pay Fried $400,000 in severance and $180,000 for his shares of the privately held firm’s stock, according to the lawsuit filed in Superior Court in Dedham, Mass.
Rather than hand Fried a lump sum, the agency agreed to make monthly installments for five years, according to court papers. After paying about $100,000, the agency told Fried in December that it was no longer obliged to pay the installments because doing so might cause the shop to default on corporate loan and credit-line agreements the agency had established with USTrust (now Citizens Bank), according to court papers.
Fried wants the resumption of the monthly payments and other monies owed to him, including payment on car leases.
In its response to the suit, McKay maintains that its commitment to repay the bank supersedes its deal with Fried. The agency cannot currently afford to repay both the bank and Fried, said McKay official Joe Burnieika. He said the agency will resume payments to Fried once it has made significant progress repaying the bank.
“File it under deadbeat ex-partner,” countered Fried. “There should be more than enough [money] for me,” especially in light of McKay’s recent infusion of funding from venture capitalist James Rappaport [Adweek, Nov. 22].
Fried joined McKay in 1995 as a minority partner in what grew into a 35-person Boston agency. Three years later, the relationship soured and Fried was “relieved of his duties,” McKay said at the time [Adweek, Sept. 14, 1998].
The agency has countersued for $16,000, which it paid to Fried as part of an insurance arrangement. K