Maurice issues writ for breach of contract

Maurice Saatchi last night issued a writ for unspecified damages against his old firm, Saatchi & Saatchi, for alleged breach of contract. The company,which ousted Mr Saatchi as chairman last month, said it had not yet seen the writ A spokesman for Saatchi & Saatchi said earlier yesterday that it was likely to issue more legal proceedings of its own later this week, but declined to give details. The company also announced the formation of a boardroom "inner cabinet" to deal specifically with the daily escalation of attacks against it.

Leading the inner group is Charlie Scott, acting chairman and chief executive. Others members are Wendy Smyth, finance director, and Clive Gibson and Sir Peter Walters, two non-executive directors.

Mr Saatchi's solicitors, Watson, Farley & Williams, issued a writ containing five claims. The main thrust of the writ is a claim for damages for "misrepresentation made orally and in writing" by Saatchi & Saatchi which led him to enter into an employmentcontract on 3 June last year, and also for breach of contract.

Mr Saatchi's action comes less than a week after he was served with a writ claiming that he orchestrated a conspiracy to injure the company. He also learnt yesterday that his surname is set to disappear from the holding company's title. Siegel & Gale, the US corporate and design company, has been commissioned to come up with a new corporate identity.

Saatchi & Saatchi declined to discuss possible additional writs. Macfarlanes, one of two firms of solicitors used by the advertising agency, is investigating several matters.

In particular it is looking into a reputed $40m (£25m) settlement that Maurice Saatchi and his brother Charles received over a legal dispute with Adidas, the German sports goods company, in exchange for providing what the company calls.marketing skills.

The rumour mill at Saatchi & Saatchi's London headquarters remained in full production yesterday. Speculation suggesting the company was about to sell Campbell Mithun, one of its US agencies, and was poised to recruit two former employees to fill the vacant chairs in its UK and European operations were the central focus.

Paul Bainsfair and John Sharkey, who run their own agency, Bainsfair, Sharkey & Trott, were rumoured as likely to fill the gaps left by David Kershaw and Jeremy Sinclair who left last week. "It's just not true," Mr Bainsfair said.

A spokesman for Saatchi & Saatchi was not prepared to make such a clear denial about speculation surrounding Campbell Mithun. The US agency is at the centre of delicate dispute with Procter & Gamble, the household products group, and Saatchi & Saatchi's biggest client. Procter, which has openly taken the side of the UK company in its fight against Maurice Saatchi, sees a possible conflict of interest as Campbell handles advertising for Dow Chemicals' household products subsidiary.

A spokesman for Saatchi & Saatchi said: "We are looking for a solution that is best for all the clients of the group."

Outlook, page 33