IPG WEIGHS COUNTERSUIT AS KASSAN IS DISMISSED: WESTERN EXEC'S LAWSUIT REVEALS DETAILS OF SPLIT

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On July 14, Interpublic Group of Cos. sent a letter to Michael Kassan saying he had 30 days to "cure" alleged breaches of his employment agreement or face dismissal. One month later, he was "terminated" by Interpublic as U.S. president and chief operating officer of its Western Initiative Media Worldwide.

The letter's existence was revealed in the complaint Mr. Kassan filed Aug. 13 in U.S. District Court, Southern District of New York, against Interpublic. The suit, alleging breach of contract and defamation of character, seeks $13.5 million in damages; a separate arbitration action in Los Angeles seeks an additional $50 million.

DUTIES REASSIGNED

Interpublic's general counsel, Nicholas Camera, said last week that Mr. Kassan had been dismissed, and his duties reassigned to Worldwide Chief Operating Officer Michael Lotito, who joined the company less than two months ago. Mr. Camera would not rule out legal action against Mr. Kassan; he said only "stay tuned" when asked about the possibility of a countersuit. Interpublic has until Sept. 2 to file its own suit or ask for an extension.

According to Mr. Kassan's suit, "The [July 14] letter complained about events -- such as profit margins from 1995 -- that were as much as five years old, or were approved by Interpublic or others, or which were standard operating procedure for Western officers."

Neither Mr. Kassan's attorney, nor Interpublic, would provide Advertising Age with a copy of the letter, so it's unclear why the company complained about profit margins or what its other concerns were.

The suit calls the letter "a complete sham designed to 'set up' the termination of Kassan." It goes on to state that Mr. Kassan attempted to "cure" the alleged breaches of his employment agreement. "For example, on August 5, 1999, Kassan, through counsel, outlined in detail how he intended to 'cure' the alleged breaches as soon as he was permitted to return to work."

'ORDERED TO LEAVE'

At the time, Mr. Kassan was on a 30-day leave ordered, according to the suit, by Western. When Mr. Kassan returned to his office on Monday, Aug. 9, and attempted to work, the suit says, he was ordered "to leave his office immediately."

In addition to the leave of absence, Interpublic "ordered him not to report to work, prohibited him from communicating with Western's clients and employees, changed the locks on Kassan's office during business hours, and disconnected his telephone and computer," according to the suit.

Mr. Kassan had an employment contract that would have ended Jan. 10, 2000, and had just signed a second contract that would have run through 2004.

"Subsequent to the July 14 letter, Interpublic through counsel, has informed Kassan that it does not intend to honor the Second [employment] Agreement because, in Interpublic's view, Kassan exercised 'bad judgment' in performing his duties under the current, and wholly distinct, Employment Agreement," Mr. Kassan's complaint states.

To counter that, the suit refers several times to a sworn affidavit given Jan. 6 by Interpublic's Mr. Camera "in an unrelated matter" attesting to Mr. Kassan's outstanding character. That affidavit was apparently connected to Mr. Kassan's effort to be reinstated by the California State Bar Association.

Mr. Kassan was suspended from practicing law after he pleaded no contest and was convicted of one count of grand theft by embezzlement. After completing the terms and conditions of his probation, according to public documents, the conviction was reduced in June 1996 to a misdemeanor and expunged. Mr. Kassan can practice law again in California if he passes a test scheduled to be administered this month.

Like Interpublic's legal battle against former Lowe & Partners/ SMS Chairman Marvin Sloves, the Kassan controversy seems more likely to be resolved in a courtroom than over a negotiating table. Asked last week about the possibility of a settlement, Mr. Camera said, "One thing I've learned in my life is to never say never. But I don't think so. Certainly not now."

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