WPP, Benatti Reach Settlement

BOSTON WPP Group and the company’s former Italian operations chief Marco Benatti have agreed to a confidential settlement that effectively ends their long-running, complex and heated legal dispute.

The two sides issued this joint statement yesterday: “WPP and Marco Benatti have agreed to a full and final settlement of the disputes between them, which are the subject of the proceedings currently before the English High Court and related proceedings in Italy.”

The deal followed a week of hearings in London’s High Court, though neither Benatti nor WPP CEO Martin Sorrell took the stand.

WPP dismissed Bennati in January 2006, after questions were raised about the latter’s earnout as part of WPP’s acquisition of Italian shop Media Club.

WPP had filed suit in a London court at that time contending that Benatti violated his employment contract with WPP by disguising a financial interest in Media Club, a company he recommended the U.K. holding company acquire. Benatti countersued WPP in Italian courts for wrongful dismissal, and had appealed against an earlier ruling that said Sorrell’s case should be heard in the U.K.

In March 2007, a U.K. court of appeals ruled that WPP’s claim against Benatti for breach of contract could be heard in English courts.

For introducing the holding company to Media Club, he earned a commission of $247,000, according to sources close to WPP. Benatti demanded an earnout of nearly $11 million, compared to the $361,000 WPP believed he was owed, spurring further investigation, which revealed Media Club was ultimately majority owned by Benatti.

Benatti has denied any improprieties while employed by WPP.

Separately last March, Sorrell settled a high-profile U.K. libel lawsuit, accepting about $236,000 in damages from Benatti and a business associate, Marco Tinelli. Sorrell accused Benatti and Tinelli of generating libelous claims posted on an Internet blog, as well as disseminating an offensive j-peg image of Sorrell with Daniela Weber, WPP Italy COO.

Weber was party to Sorrell’s invasion of privacy action and was awarded $59,000.

The case generated worldwide headlines for its novel digital communications libel claim and its frequently unflattering and inflammatory references to Sorrell.