Final legal battle hangs over Publicis and True North split

- The bitter divorce of Publicis from its former US partner True North may be the subject of a new legal battle over claims by the Chicago-based network that it will be left $30 million out of pocket by the final settlement.

- The bitter divorce of Publicis from its former US partner True North may be the subject of a new legal battle over claims by the Chicago-based network that it will be left $30 million out of pocket by the final settlement.

True North this week intimated that it might begin legal proceedings over the deal, which would allow it to separate totally from the French group.

The latest row is over a proposed restructuring by Publicis permitting True North to transform its non-publicly traded investment into publicly-traded shares (Campaign, 13 November).

Now True North, led by its chief executive Bruce Mason, has calculated that a disposal of its 8.8 per cent stake in Publicis would leave it with a pre-tax loss of almost $30 million in the fourth quarter of the year.

A True North spokeswoman said: "Our financial and legal people are going over this transaction to make sure Publicis meets the obligations agreed in our settlement of May last year. If it doesn't we will have to look at other possibilities."

Matters may come to a head at a meeting of Publicis shareholders next Friday where they will be asked to approve the issue of $146 million worth of new shares.

"We'll see what happens," a Publicis executive commented. "If True North is unhappy with the proposal it has the rights of all stockholders to vote its shares the way it wants to."

However, it is believed that True North would be unable to sue successfully over an investment which has turned out to be of lower value than expected.

The threat of a return to the courtroom opens yet another chapter in the most acrimonious inter-agency dispute in world advertising history.

It stems from a cross-shareholdings agreement established in 1988 as part of a global trading alliance between Publicis and True North's FCB subsidiary.

Ill-feeling between the partners came into the open when Publicis acquired the Bloom agency in New York, a move which True North claimed was in breach of its alliance agreement.

It blew apart spectacularly last year when Maurice Levy, the Publicis chairman, failed in a hostile take-over bid for True North and mounted a series of hostile lawsuits in an attempt to derail True North's acquisition of the Bozell network.