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UTA battle: Lawsuits, $950,000 expense account fuel fight between Hollywood agency and ex-partner

A blistering battle between Beverly Hills-based United Talent Agency and ex-partner Michael Kassan centers on alleged over-the-top spending and a $950,000-per-year expense account, a perk that Kassan said he received as part of the company's 2021 takeover of his firm.

UTA bought Kassan's MediaLink marketing consultancy for $125 million in December 2021, part of an effort to deepen the talent agency's relationships with major brands, such as Google, that MediaLink had access to. At the time, UTA brought Kassan on as a partner.

Kassan and UTA filed dueling lawsuits this week, each accusing the other of breach of contract.

UTA contends that it thought it was striking a partnership with a reputable businessman but over the last two years, the agency said it had learned that his spending was out of control. Kassan, for his part, said that UTA was well aware of his spending habits and that his firm has continued to be profitable during its tenure within UTA.

The Hollywood talent firm acquired MediaLink from the Ascential Group Ltd. The deal required approval from Kassan, who founded the business in 2003 after he recognized that working with major advertisers that wanted to get their products, including cars and beverages, displayed prominently on TV shows and other platforms could be a lucrative niche.

Kassan agreed to stay on as MediaLink’s chief executive and chairman. Shortly after joining UTA, Kassan told executives that he expected to receive $1.5 million up front each year, "netting him $950,000 (post tax) to spend as he deemed fit," according to Kassan's complaint.

In its lawsuit filed late Tuesday in Los Angeles County Superior Court, UTA said it fired Kassan for "wasting millions of UTA's dollars on his lavish personal lifestyle," including Kassan's alleged use of corporate funds to pay for his housekeeper and to rent an apartment for his personal driver.

"[Kassan] allowed his wife to have a company credit card, despite the fact she had no affiliation with MediaLink or UTA," the UTA lawsuit said. (Kassan's representatives, in response, said Ronnie Kassan's credit card purchases were made on behalf of her husband and MediaLink. They included a list of media executives, including Zimmer, and prominent bankers who received gifts.)

"Not only did Kassan insist on private flights — he spent a small fortune of UTA’s dollars on luxury travel, including hundreds of thousands on private airfare for his entire family for trips that Kassan acknowledges were personal in nature and had no rational business purpose," the UTA lawsuit said.

Attorneys for Kassan on Tuesday filed a breach of contract lawsuit, alleging that UTA knew that it had agreed to the $950,000 expense account, among other things, when it acquired Kassan's New York-based marketing consultancy firm.

Kassan's complaint was filed with JAMS Mediation Services.

Read more: UTA acquires New York strategic advisory firm for $125 million

Kassan alleges that UTA reneged on promises, and his attorney noted in a letter to UTA last week that it — and agency Chief Executive Jeremy Zimmer — were well aware of Kassan's extravagance before the merger was complete.

"Mr. Zimmer openly acknowledges that prior to the close of the transaction, he accepted how Mr. Kassan 'rolls,'” according to a March 8 letter from Kassan's attorney, Sanford Michelman of the firm of Michelman and Robinson .

Kassan's 27-page personal services contract, included as part of the legal claim filed by Kassan, said that UTA would reimburse Kassan for typical business expenses as well as "special expenses" up to $950,000 as long as they were "consistent with past company practice."

The dispute came to a head last week, prompting Kassan to resign on March 6, according to the documents.

Kassan waived his claim to nearly $10 million in severance so that he would not be held to a noncompete agreement with MediaLink, according to his lawsuit. UTA contends that Kassan is still bound by his noncompete agreement.

"Michael Kassan agreed to sell MediaLink, the company he founded, to UTA because he was led to believe it would be a great partnership for both companies," Michelman said in a statement. "However, it became clear that Jeremy Zimmer had a secret plan to not honor the contract, and when Michael confronted him, Zimmer refused to honor the deal."

Michelman said Kassan was "left with no other option other than to resign" and sue UTA.

Read more: Talent agency A3 to shut down on Monday

For its part, UTA said it had previously informed Kassan that it was conducting a probe of his expenses. In February, Kassan agreed to new protocols for spending, according to documents filed in the JAMS case..

"Michael Kassan was terminated by UTA on March 7 and made aware well before that UTA had grounds to fire him," attorney Bryan Freedman, who is representing UTA, said in a statement. "His claim against UTA has no merit and is an attempt to divert attention from the misappropriation of company funds that led to his termination.”

UTA's lawsuit said that almost immediately after joining UTA, Kassan began "circumventing or failing to maintain standard control processes to ensure that company funds were used to pay for his extravagant personal expenses, without question, and with the goal of not leaving any trace behind."

Those included using UTA funds to pay off credit card debts of about $500,000, the suit said.

UTA is seeking unspecified damages.

Kassan's representatives bristled over UTA's allegations that Kassan's big spending constituted fraud.

According to Kassan's side, another dispute was over Zimmer's alleged agreement to let Kassan run the UTA Entertainment and Marketing department once the 2021 deal closed.

Read more: Western Initiative Media Says It Fired Exec

Kassan was told that he would be in charge of its long-term strategy and daily operations, according to his lawsuit, alleging that UTA executives "secretly concocted a scheme that post-close of the acquisition [that] UTA Marketing would not report to Kassan, as promised." That decision rendered MediaLink a 'silo,' within the agency,” his lawsuit said.

UTA also failed to invest in MediaLink, Kassan alleged, noting that "during the entire time UTA owned MediaLink, Kassan increased its top and bottom-line revenues and profits." But UTA cut marketing expenditures, Kassan alleged in the suit, "curbing Kassan’s ability to continue with his vision to build a community."

Kassan is seeking damages of no less than $25 million, according to his suit.

His lawyer, Michelman, alleges "even more evidence of bad-faith" dealing on UTA's part because "Zimmer, his wife, and other UTA executives ... enjoyed the benefits of the expenses to which they now complain."

"For example, Zimmer complained that Kassan’s use of private aviation was not approved, but Zimmer (and his wife) were on the very plane rides (there were numerous) for which he tried to manufacture 'Cause,' " Kassan's suit alleges.

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This story originally appeared in Los Angeles Times.