Two senior ex-William Morris agents are suing the tenpercentery, claiming that they were cheated on profit-sharing.
Gregory Lipstone and Steven Glick claim that the value of their partnership shares were vastly reduced as part of a scheme to under-report profits and award windfall bonus to a favored few.
Suit, filed Wednesday in L.A. Superior Court by well-known plaintiffs’ firm Cotchett, Pitre, Simon & McCarthy, alleges financial shenanigans in valuing WMA’s stock. Lipstone and Glick seek an accounting and unspecified damages believed to be in the millions of dollars.
In a statement, WMA spokesman Chris Petrikin said, “We have not yet been served, but based on what we’ve been told about this lawsuit, it is clear to us that the complaint is completely without merit. We intend to defend ourselves vigorously, and we fully expect to prevail.”
According to the complaint, the employee-owned agency calculated net profits after the voting shareholders awarded bonuses to themselves and others. As a result, net profits were much lower for those, such as Glick and Lipstone, who did not receive bonuses and were rewarded only with the value of their stock.
Glick and Lipstone’s employment agreements contained arbitration clauses. Suit seeks to have them ruled unenforceable.
Both Glick and Lipstone joined ICM in 2005. At WMA, Lipstone was a 20-year veteran whose TV clients included “American Idol” producer FremantleMedia, Granada and BBC Worldwide. Glick was a 25-year veteran of the agency and head of its TV helmer department. Their departure came in the wake of a management shakeup at WMA.
Under WMA’s shareholder agreement, the agency repurchases an employee’s stock at a computed value. According to the complaint, however, “WMA has been engaged in a scheme to obtain the benefits of the increased value of the company, which Glick and Lipstone brought to it, while short-changing them on the profits to which they were entitled as owners of the company.”
Suit also alleges that the executive committee discouraged discussion of the stock valuation and continually deflected questions by assuring Glick and Lipstone that WMA is a family and that it takes care of its own.
In addition to alleging that the agency’s executive committee took care only of itself and a favored few, the suit rehashes the years of upheaval at the agency from the 1991 defection of five agents to ICM to the 1999 arrival from ICM of Jim Wiatt and David Wirtschafter.
After an internal power struggle, the old guard departed in 2004, included those who had hired and mentored Glick and Lipstone. Wiatt became CEO, Wirtschafter president. The last straw compelling Glick and Lipstone to leave, according to the suit, was a devastating profile in the New Yorker of Wirtschafter. Wirtschafter spoke candidly about his clients in the article, leading to the departure of Halle Berry and Sarah Michelle Gellar.