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Unseemly Row Results as PR Execs Split From Firm : Relations: Assault and theft charges are hurled as suit and countersuit follow creation of a new company.

August 03, 1995|From Bloomberg Business News

ATLANTA — At 10 a.m. on July 14, Joseph Ledlie, managing director of the Atlanta office of public relations firm Manning Selvage & Lee, phoned his New York boss and quit.

Two other top Manning executives were quitting, Ledlie told a nonplussed Richard Funess. Faxes to follow.

By the time the faxes stopped that morning, Funess had learned that nine of the 16 employees in Manning's most profitable office were leaving to form a competing company, Jackson, Spalding and Ledlie.

That touched off events that may go down in public relations annals as the time some PR folks forgot everything they tell clients about how to handle disruptive news. In this case, the PR practitioners weren't the cool, behind-the-scenes spin doctors they profess themselves to be. They became participants in an unseemly public brawl.

Within days, Manning sued the defectors for stealing clients on company time; the defectors countersued for slander and theft; Ledlie filed assault charges, and 14 of Manning's 22 clients quit, including Delta Air Lines, which refused to do business with either agency.

"This hurts the entire PR profession," said Todd Clay, a Delta spokesman. "There's a lack of understanding about what PR folks do and this doesn't help anyone."

Other Atlanta PR shops are noting, if not savoring, the irony. 'You don't expect to see PR guys in the spotlight," said Ken Willis, president of GCI/Atlanta. "It's sort of like looking down and noticing that the cobbler's children don't have nice shoes."

The split has elements of a family feud as well. King & Spalding, the Atlanta law firm that initially represented Manning in its suit against the defectors, was founded by the great-grandfather of one of them, Bolling (Bo) Spalding. And Bo's father is a retired King & Spalding partner.

Bo Spalding "is extremely upset that Manning would use the family firm to attack him," said Richard Robbins, an attorney representing the new PR firm. King & Spalding subsequently withdrew as Manning's attorneys. It didn't say why.

The alleged assault happened, according to Ledlie, when two men identifying themselves as security consultants showed up not long after his phone call to New York. They demanded that the three top executives and other defecting employees submit to searches of their offices, briefcases, purses and even cars, Ledlie said. Some personal items, including one employee's daily scheduler, were taken, the defectors charge.

Then, while he was being escorted out of the building, Ledlie said, he stopped to look into an office and was poked hard--"hard enough that it hurt"--in the chest by one of the security men.

"It was humiliating," Ledlie said. "We wanted an amicable split."

Manning declined to comment on the assault charge, which names it as well as the security man as defendants.

A U.S. District Court judge has denied Manning's petition for a temporary restraining order against the new firm. Manning is expected to seek a permanent injunction in the next week or so in Fulton County Court, which has taken over jurisdiction of the matter.

*

Ledlie said he and his colleagues decided to form their own firm simply because of the opportunity for success in Atlanta, one of the fastest-growing cities in the nation.

"We wanted to ride the Atlanta wave," Ledlie said. "This city is a great place to be and we frankly were tired of taking money and shipping it up to corporate headquarters in New York."

New York-based Manning, which has eight offices in the United States and abroad, is one of the country's 15 biggest PR firms. Its Atlanta office is the city's fourth-largest PR shop, with billings last year of $2.3 million.

The Atlanta office has posted a profit of $600,000 in each of the last two years, according to court documents. That made it the most profitable Manning office, according to people familiar with the company.

Those profits are in serious jeopardy now, however, as the defecting employees are said to have controlled virtually all of Manning's clients.

In its suit against the new agency, Manning charges Ledlie and his partners with trying to destroy the firm.

Manning says the defectors created their company partly during Manning's business hours, thus hurting Manning's operations. It also charges that Ledlie visited major clients on company time in an effort to snatch their business from Manning.

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