KASSAN SUES WESTERN, INTERPUBLIC FOR $63.5 MIL

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The Michael Kassan-Western Initiative drama took a surprising turn late last week as Mr. Kassan filed an arbitration action and lawsuit against his employer claiming breach of contract and defamation of character.

Mr. Kassan's actions against Western Initiative Media Worldwide and parent Interpublic Group of Cos. seek a total of $63.5 million in damages.

MOVE FOR MEDIATION

According to a release issued by Rogers & Associates, Western's North American president-chief operating officer filed a notice of intent to seek mediation before the American Arbitration Association in Los Angeles, as required by his current employment agreement. He is seeking $50 million in that action.

He also filed a suit in U.S. District Court in the Southern District of New York, for "anticipatory breach of [a five-year] contract" scheduled to run from Jan. 1, 2000, to Dec. 31, 2004. Mr. Kassan is seeking $13.5 million in that action.

Nicholas Camera, Interpublic's general counsel, had not seen the documents and declined comment.

'INTERPUBLIC'S SCHEME'

According to the release, the suit alleges that "the purpose of Interpublic's scheme has been to force Kassan to resign or devise a pretextural reason to terminate him, thereby, according to Interpublic, nullifying both his current agreement with Interpublic and the new employment agreement."

The suit also alleges Interpublic's actions "included ordering Kassan not to report to his office and not to communicate with Western's clients and employees, conducting an 'audit' to search (in vain) for wrongdoing on behalf of Kassan, rifling through his personal files, removing Kassan's support staff, redirecting his telephones to someone else's office, telling people who called-including his bankers and family members-that Kassan did not work at the company anymore, opening his personal mail, taking personal faxes to other employees, and disseminating defamatory statements that Kassan was on an extended leave of absence from Western because of his role in financial misconduct when it knew that Kassan had committed no such misconduct."

Ron Rogers, principal at the Los Angeles public relations agency bearing his name, said Mr. Kassan wasn't available to comment. Mr. Kassan has hired attorney Philip Reiss of David & Gilbert, New York, to represent him. Mr. Reiss was not available for comment.

ON LEAVE OF ABSENCE

The suit is the first indication that a financial audit being conducted by Interpublic might be a search for wrongdoing by Mr. Kassan. He has been on a leave of absence since last month.

Larry Lamattina, global chairman-CEO of Western, previously told Advertising Age the audit is "nothing more than the normal audit we institute on an ongoing basis for all Interpublic companies" (AA, Aug. 9).

Mr. Kassan, when asked about that audit earlier, said: "I am unaware of any audit other than what might be the normal annual audit. Since I am not aware of it, my being out of the office couldn't be related to it" (AA, July 26).

Last week, an Interpublic executive said the audit "is ongoing."

Calls to Mr. Kassan's Los Angeles office continue to be forwarded to the New York office of Michael Lotito, Western's acting chief operating officer.

Rogers & Associates until recently was the PR agency used by Western. It was dropped when Western decided to use sibling Interpublic shop Miller Shandwick.

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