WPP's Sorrell on Y&R Lawsuit: "Bring It On!"
WPP chief Martin Sorrell lived up to his litigious reputation when he nixed rumors there might be a settlement in the Y&R v. Pacific Equity Partners case in Australia. Sorrell told The Australian:
We’re looking forward to the court action.
The back story: WPP bought The Communications Group (and its famed George Patterson unit) for $80 million AUS from Pacific Equity Partners. It sued PEP when two key executives left Patterson and the shop lost clients such as Foster’s, National Australia Bank and Cricket Australia.
WPP claimed that two execs, Anthony Heraghty and James McGrath, had been given “secret payments” to induce them to stay with the agency for one year; had WPP known of the payments — and the likelihood the pair would leave when the year was up — it would have paid much less, WPP claims. WPP’s Y&R Brands is seeking $10 million AUD in damages.
The suit went a bit wrong for Sorrell recently when a judge ruled that Y&R Advertising chief Hamish McLennan (pictured) can be sued by PEP for “misleading and deceptive conduct” in WPP’s acquisition.
In the runup to the trial, some had believed that open-court nastiness could be avoided, but no. Sorrell said:
“We’re slightly amazed by the disarray the other side seems to be in over changing the identity of their legal advisers and with Clayton Utz stepping down,” Sir Martin said. “We’re looking forward to the court action.”
In some ways, it’s not surprising. Bad blood has been building for years. Look what McGrath said in 2006 when he hopped over to Clemenger BBDO:
“I knew that WPP are litigious and I knew that WPP are very worried about all sorts of phantoms and I just look at what’s happening with James and Anthony. All I’ve heard about Anthony is that he’s a man of great integrity, I know that James is an honourable man; if I was looking at what WPP is doing simply as a human being and a commercial perspective I honestly don’t understand it. I would absolutely stand by James in any circumstance.”
For Y&R watchers, the trial could answer the interesting questions of what did McLennan know and when did he know it during the acquisition? And why did PEP chairman Tim Sims claim he didn’t know of the payments, only to later claim that he did?
Jim Edwards, a former managing editor of Adweek, has covered drug marketing at Brandweek for four years, and is a former Knight-Bagehot fellow at Columbia University's business and journalism schools. Follow him on Twitter or send him an email.
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