The World: Sydney - PEP backs down in legal battle against WPP

Pacific Equity Partners has backed down from its legal dispute with WPP over secret payments made to two executives during the $80 million sale of George Patterson.

The long-running battle came about following allegations that PEP gave $1.5 million in secret payments to George Patterson's former managing director, Anthony Heraghty, and its creative director, James McGrath, in order to lock them into their jobs for a year after the sale of the company to WPP went through.

WPP said that it would have paid less for the business had it known of the arrangement, and PEP has now agreed to pay close to $10 million in damages, with Heraghty and McGrath both issuing apologies.