Group Press Releases
Aegis to Appeal US Court Judgement
28 October 2002
Aegis Group plc today announces its intention to appeal against a New York court ruling delivered on Friday evening in relation to a breach of contract action brought by Independent Media Services, Inc. The jury awarded a sum of $6,827,164 against Aegis Group plc, Carat North America, Inc., and Carat USA, Inc. According to legal counsel for Aegis and the Carat companies, there are strong grounds for appeal based upon several erroneous rulings made by the Court.
The jury's award represents approximately 23% of the amount sought by the Plaintiff. During the trial, the Judge dismissed one claim that had been asserted by Independent Media and Independent Media withdrew its two other claims.
In the lawsuit, Independent Media claimed that Aegis and the Carat companies breached a non-competition agreement that they entered into with Independent Media in October 1999, by participating in an agency review commenced by New Line Cinemas in July 2000. New Line, through an independent consultant, put its media buying account into a blind review in July 2000 and invited Carat USA to participate in that blind review. Aegis and the Carat companies deny that the agreement's prohibition against soliciting Independent Media's customers applies to an agency review initiated by a client.
Carat USA was awarded New Line's media buying account in February 2001.
The Group's trading continues the recovery seen at the time of the interim announcement on 10 September, with further clear improvements being seen in US broadcast media. Synovate US is also enjoying the benefits of the mild US recovery and of the restructuring programme which continued well into the second half. Europe and Asia Pacific continue to trade in line with expectations.
The results for the full year, before exceptional costs, are therefore expected to be significantly better than 2001, although pretax profits will be held back by a somewhat higher level of restructuring and other exceptional costs than was expected in September.
