Lowe, IPG Near Settlement In Yearlong Legal Battle

A nearly yearlong battle of claims between Interpublic Group and Frank Lowe appears to be heading toward a settlement that may be finalized as early as this week, said sources, who characterized the proposed deal as “a draw.”

In January, IPG filed an arbitration claim that accused Lowe, former worldwide chairman of the IPG shop that bears his name, of using proprietary information to destabilize his ex-agency and employer. Lowe denied the allegation and sought to have the complaint dismissed. Six months later, Lowe countered with a civil lawsuit that accused IPG of defaming him via “false and injurious statements” in both its arbitration claim and a press release about it.

The suit, filed in state Supreme Court in New York, also accused IPG of tortious interference in Lowe’s development of a new agency—The Red Brick Road in London—and sought unspecified punitive and compensatory damages.

Under the terms of a proposed settlement, IPG and Lowe would drop their respective claims, said sources. And unlike past settlements between IPG and other ex-agency honchos, such as Marvin Sloves and Michael Kassan, no money is expected to change hands.

IPG declined comment and Lowe could not be reached at press time.

Neither IPG nor Lowe could claim victory or defeat, sources added, and both would shed outside legal costs associated with such battles. As one source put it, “It means we decide to grow up and go home and get on with our lives.”

IPG’s initial claim came a month after Lowe re-entered the ad business with the launch of Red Brick Road. The shop’s founding partners include other former top Lowe executives, including Paul Weinberger and Paul Hammersley, and its first client was Tesco, which shifted its $80 million account from the London office of Lowe to the new agency in March.

While Tesco’s shift hurt its former shop, it stemmed from a client decision that IPG could not reverse. IPG, however, remained concerned about the prospect of further client and staff erosion, and that prompted the holding company to file its claim with the American Arbitration Association on Jan. 13.

Lowe, however, maintained his innocence and demanded an apology. His subsequent suit alleged that IPG issued “false and injurious statements to the press” and attempted to portray Lowe, “an honorable and renowned advertising executive, as a villain.” In court papers responding to the suit, IPG denied the allegations and claimed the action was “frivolous” and should be dismissed. “To the extent Sir Frank’s reputation has been damaged in any way, it has been self-inflicted by the very colorful life he has led.”

IPG’s previous disputes with Sloves, former chairman of Lowe’s New York office, and Kassan, former North American president and COO of Western Initiative Media, resulted in the holding company paying each executive a chunk of what he was owed in his contract. IPG had accused Sloves both in an arbitration proceeding and in court of tortious interference in Mercedes-Benz’s May 1999 shift of its $100 million U.S. account from Lowe to Omnicom Group’s Merkley Newman Harty in New York. An arbitration panel determined, however, that Mercedes moved the account for business reasons and ordered IPG to pay Sloves $1.3 million. Kassan filed an arbitration claim and federal lawsuit in 1999 after he was placed on leave and subsequently dismissed. In his suit, Kassan accused IPG of breach of contract and defamation for alleging that he was placed on leave “because of his role in financial misconduct.” The case was settled out of court for an undisclosed sum.