WPP's Sorrell Plans Further Reprisals Following George Patterson Victory

Last Updated Nov 10, 2009 2:47 PM EST

What is WPP boss Martin Sorrell planning now that he has won his fight with two former George Patterson Y&R executives who took secret payments during Sorrell's takeover of their company?

WPP won a $10 million AUD settlement and an unreserved apology in its fight over the acquisition of the famed Australian ad agency responsible for the Carlton "It's a Big Ad!" campaign.

Two Patts execs, Anthony Heraghty and James McGrath admitted they received $1.5 million in payments to stay for 12 months after the acquisition. The implication in the payment was that the pair intended to bolt once the term of the secret deal was up, which is what happened. WPP claimed it would not have done the deal had it known of the payments.

Sorrell told mUmBRELLA that a settlement was reached some time ago, but was breached before news came out on Nov. 9:
... the implementation of their decision was not as good as it could have been, involving a breach of the settlement agreement they had only recently executed. Unfortunately this is not the last that you will hear of this issue."
Ulp! The Aussie press said the defendants in the case had failed to meet some payment deadlines:
Sources have told B&T that PEP, which agreed to the settlement more than a month ago, only made the payment to WPP at the eleventh hour last week after repeatedly failing to meet promised deadlines.
[Sorrell said:] "There is some other stuff to come, just leave it like that."
The Australian reported that lawyers for George Patterson's former parent company could be the target:
The Australian understands the new action could target Clayton Utz, the lawyers for George Patterson Partners' former parent The Communications Group, in terms of its conduct in the settled case.
You can read Heraghty and McGrath's apology here. You can read WPP's joint statement with Pacific Equity Partners, the former Patts owner, here. And Sorrell's gleeful personal statement can be found here.

The settlement is a huge victory for Hamish McLennan, Y&R Brands' global CEO. The defendants had alleged that he knew of the payments -- which would have placed him in an untenable position with WPP if it had been the case.

But, as WPP's statement says, "PEP accepts that WPP and its representatives including Mr Hamish McLennan were not aware of the agreements."

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