UTA v. Kassan
UTA v. Kassan
UTA v. Kassan
151990)
Sean M. Hardy (Bar No. 266446)
2 FREEDMAN TAITELMAN + COOLEY, LLP
1801 Century Park West, 5th Floor
3 Los Angeles, California 90067
Telephone: (310) 201-0005
4 Facsimile: (310) 201-0045
[email protected]
5 [email protected]
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Attorneys for Plaintiffs
7 United Talent Agency, LLC & Media Link, LLC
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Plaintiffs United Talent Agency, LLC (“UTA”) and Media Link, LLC (“MediaLink”)
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(UTA and MediaLink are, collectively, “Plaintiffs”), hereby complain and alleges against
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Defendants Michael E. Kassan (“Kassan”), Michael Kassan, Inc. (‘MKI”), and DOES 1 through
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50, inclusive, (Kassan, MKI, and DOES 1 through 50 are, collectively, “Defendants”) as follows:
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INTRODUCTION
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1. In utter disregard for his fiduciary obligations as a partner of UTA, media and
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advertising executive Michael Kassan has run rampant with his business expense accounts –
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wasting millions of UTA’s dollars on his lavish personal lifestyle. In 2003, Kassan founded the
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strategic advisory firm MediaLink. MediaLink was later acquired by UK-based Ascential PLC in
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2016. In December 2021, following an aggressive solicitation effort by Kassan, UTA acquired
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COMPLAINT
1 MediaLink from Ascential. As part of that transaction, Kassan remained CEO of MediaLink (now
2 wholly-owned by UTA) and became a UTA partner subject to the terms and conditions of his
3 Partner Services Agreement. In order to secure UTA’s investment, Kassan presented himself as a
4 trustworthy businessman, who had operated within the stringent controls and regulations of a
7 failing to maintain standard control processes to ensure that company funds were used to pay for
8 his extravagant personal expenses, without question, and with the goal of not leaving any trace
9 behind. For instance, not only did Kassan require a personal driver – he surreptitiously used
10 UTA’s money to pay for his driver’s apartment. Not only did Kassan use a company credit card
11 for his personal expenses - he allowed his wife to have a company credit card, despite the fact she
12 had no affiliation with MediaLink or UTA, so she could shop for extravagant luxury goods. Not
13 only did Kassan insist on private flights – he spent a small fortune of UTA’s dollars on luxury
14 travel, including hundreds of thousands on private airfare for his entire family for trips that Kassan
15 acknowledges were personal in nature and had no rational business purpose. Kassan even used
16 company monies to pay for his personal housekeeper. In 2023, Kassan went so far as to use
17 nearly $500,000 in company funds to pay off his personal credit card debt, despite multiple
18 warnings from MediaLink’s top finance executive. In 2022, Kassan had over $700,000 in
19 company funds wired to his personal S-Corporation. In short, Kassan erased any line between his
22 beholden to him personally, rather than to MediaLink or UTA, and were discouraged from
23 disclosing certain matters to UTA. Kassan used his influence to hide his misconduct from UTA
24 for over a year. However, once UTA uncovered the scale of Kassan’s financial misconduct, it
25 promptly confronted him about it. Kassan was unrepentant, and could offer no documentation or
26 receipts to substantiate many of his outlandish “business” expenses – for the obvious reason that
27 they were clearly improper personal expenses. As a result, following an investigation, Kassan was
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COMPLAINT
1 4. By way of this Complaint, UTA and MediaLink seeks to hold Kassan accountable
2 and recover damages and losses resulting from his shameless acts. Given the malicious,
3 oppressive, and fraudulent nature of Kassan’s scheme, Plaintiffs are also entitled to a substantial
5 THE PARTIES
6 5. Plaintiff UTA is a Delaware limited liability company with its principal place of
10 7. Defendant Kassan is an individual who at all relevant times was a resident of Los
14 9. There exists, and at all times herein mentioned there existed, a unity of interest and
15 ownership between Kassan and MKI such that any individuality and separateness between Kassan
16 and MKI has ceased, and Kassan is the alter ego of MKI. Adherence to the fiction of the separate
17 existence of MKI as a separate and distinct identity from Kassan would permit an abuse of the
18 privilege to operate as a corporation and would sanction a fraud or promote injustice. As such,
20 10. There is such a unity of interest and ownership between Kassan and MKI that the
21 individuality of MKI or its separateness from Kassan has ceased, because, on information and
22 belief: (i) there has been a commingling of funds and other assets between Kassan and MKI; (ii)
23 there has been an unauthorized diversion of corporate funds or assets from MKI to Kassan for
24 purposes other than corporate uses; (iii) Kassan treats the assets of MKI as his own; (iv) Kassan
25 owns all of the stock of MKI; (v) Kassan has held out that he is personally liable for the debts of
26 MKI; (vi) MKI has failed to maintain minutes or adequate corporate records; (vii) Kassan and
27 MKI use the same attorney; (viii) MKI lacks corporate assets and is undercapitalized; (ix) Kassan
28 utilizes MKI as a mere shell, instrumentality or conduit for his personal business; (x) Kassan has
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COMPLAINT
1 taken steps to conceal the relationship between his personal business activities and MKI; and (xi)
2 Kassan uses MKI to procure labor, services, and merchandise for himself. As such, Kassan is
4 11. The true names and capacities, whether individual or corporate, of the defendants
5 named herein as Does 1 through 50, inclusive, are unknown to Plaintiffs, who therefore sue said
7 12. Each of the Defendants, including those designated as a Doe, are responsible for
8 the events alleged herein and the damages caused thereby as a principal, agent, co-conspirator or
9 aider and abettor. Plaintiffs will seek leave of this Court to amend this Complaint to allege the
10 true names and capacities of such Defendants when the same have been ascertained.
11 13. The Defendants at all times relative to this action were the agents, servants,
12 partners, joint venturers and employees of each of the other Defendants and, in doing the acts
13 alleged herein, were acting with the knowledge and consent of each of the other Defendants in this
14 action.
19 15. Venue is proper in this County pursuant to California Code of Civil Procedure
20 sections 428.10, et seq., and pursuant to California Code of Civil Procedure section 395.5 because
21 the principal place of business or residence of each party is in Los Angeles County and a
22 substantial portion of the operative facts described herein occurred in this County.
23 FACTUAL ALLEGATIONS
24 16. In December 2021, UTA completed its acquisition of MediaLink from Ascential
25 PLC. As a result, UTA became the sole member of MediaLink, its wholly-owned subsidiary.
26 17. In connection with the acquisition, UTA, MediaLink and Kassan entered into a
27 written Partner Services Agreement, dated as of December 15, 2021 (the “Agreement”). Pursuant
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COMPLAINT
1 to the Agreement, for an initial term ending on December 31, 2026, Kassan agreed to serve as the
3 18. Pursuant to the Agreement, Kassan expressly agreed to report to, and be subject to
4 the direction of, UTA’s Board of Directors and UTA’s Chief Executive Officer.
5 19. Paragraph 3(h) of the Agreement is entitled “Expenses” and provides as follows:
13 20. Paragraph 3(i) of the Agreement is entitled “Special Expenses” and provides as
14 follows:
15 During the Term, [Kassan] shall be permitted to include in the annual [MediaLink]
budget up to Nine Hundred Fifty Thousand Dollars ($950,000) of special expenses
16 consistent with past [MediaLink] practice; provided, that the amount of such
17 special expenses (if any) must conform to an annual budgeted EBITDA that does
not exceed the applicable Annual Target EBITDA for such year provided, further,
18 that the amount of any such permitted special expenses paid in any fiscal year shall
reduce the MediaLink EBITDA in such fiscal years.
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20 21. The Agreement’s “Special Expenses” cap of $950,000 was intended to serve as
21 reimbursement for business expenses actually incurred by Kassan, over and beyond a normal
22 business expense, such as private jet travel flights. Moreover, as evidenced by the inclusion of the
23 phrase “(if any)” after the phrase “the amount of any such permitted special expenses”, Kassan
24 was entitled to these special expenses only with respect to a budget that meets certain EBITDA
25 goals.
26 22. In clear violation of the Agreement, Kassan began directing large sums of
27 MediaLink and UTA money to himself, without providing any contemporaneous documentation
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COMPLAINT
1 23. Kassan’s breaches began almost immediately upon signing the Agreement. In and
2 around December 2021, a mere two weeks after the closing of UTA’s acquisition, Kassan wrote
3 checks to himself from MediaLink’s business checking account which amounted to approximately
4 $155,000. When confronted about these payments, Kassan claimed these amounts were
5 reimbursements from UTA for charitable donations he made individually. Further, Kassan could
6 not provide any rational explanation regarding how such charitable donations constituted proper
7 business expenses.
8 24. In 2022, Kassan engineered a scheme to divert MediaLink funds to his personal
10 MediaLink’s most senior finance executive to pay what Kassan described as “bi-monthly
12 25. Ultimately, Kassan received four payments between April 2022 and October 2022
13 totaling $712,499.99. MediaLink’s top finance executive ceased making these payments to
14 Kassan following October 2022 when she evidently realized that the Agreement did not permit
15 such lump sum payments. Most disturbingly, that executive, when reporting to UTA on usage of
16 the $950,000, failed to disclose the $712,000 payments to UTA due to the toxic, intimidating
18 26. UTA later confronted Kassan about the $712,499.99 worth of payments in
19 December 2023, but he was unable to provide any detail as to what this extraordinary amount of
20 money was spent on. Kassan was unable (or unwilling) to provide documentation credibly
22 27. Kassan further abused his position as MediaLink CEO by failing to adhere to
23 proper controls and by fostering a culture where personal loyalty to himself was promoted over
24 loyalty to MediaLink or UTA. A clear consequence of the toxic culture Kassan created occurred
25 in 2022, when UTA requested MediaLink’s seniormost finance executive to provide a breakdown
26 of Kassan’s expenses, including how such expenses tracked against the $950,000 “Special
27 Expenses” cap. That executive then provided a spreadsheet that purported to reflect Kassan’s
28 expenses to date, but failed to disclose that Kassan had paid $712,499.99 to himself. When UTA
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COMPLAINT
1 later confronted the executive about her failure to include these amounts, she was unable to
2 articulate a principled reason; a consequence of Kassan requiring that personal loyalty to himself
4 28. Kassan further breached the Agreement by using MediaLink funds to pay his
5 personal credit card debt. In 2023, Kassan used MediaLink’s Wells Fargo account to pay off
6 approximately $486,469.96 for his personal credit cards. Notwithstanding that other UTA
7 accounts require “dual authorization” (e.g., separation between a party that can initiate a wire and
8 one that can release a wire) Kassan was the sole signatory for this MediaLink Wells Fargo account
9 and (contrary to proper controls) was singularly able to both initiate and release funds.
10 29. This Well Fargo account had previously been used by MediaLink to deposit client
11 funds. After UTA acquired MediaLink in December 2021, it was incumbent upon Kassan to
12 ensure that client funds were deposited in a UTA-managed business account. Kassan inexplicably
13 failed to cause MediaLink clients to deposit checks in a UTA account, and instead allowed them to
15 (despite MediaLink’s robust administrative and finance staff) Kassan took it upon himself to
16 personally deposit paper checks sent by clients to the MediaLink Wells Fargo account via his
17 mobile app, instead of allowing such checks to be deposited by his finance team to an approved
18 UTA-managed business account. Kassan then blatantly converted these company funds to cover
19 his own personal debts. In short, Kassan treated these company funds and this bank account as a
21 30. Kassan’s first payment from the Wells Fargo account occurred on January 1, 2023
22 and consisted of $160,000 to pay for his personal credit cards. MediaLink’s seniormost finance
23 executive noticed this unusual payment and questioned Kassan about it via email on January 26,
24 2023, asking him if it was a mistake or if it related to a MediaLink, expense in which case she
26 31. Kassan flagrantly continued his unlawful use of company funds, despite being
27 notified of the issue by MediaLink’s most seniormost finance executive. On February 6, 2023, a
28 mere 11 days after being warned by MediaLink’s seniormost finance executive, Kassan used
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COMPLAINT
1 another $160,000 from MediaLink’s Wells Fargo account to pay his personal credit cards. That
2 finance executive emailed Kassan again on February 9, 2023 after this second payment was made,
3 noting she was “slightly concerned as we are about to go into audit” and again on February 21,
4 March 21, 2023 and April 6, 2023, reiterating the “need to resolve th[e] two payments out of
5 Wells Fargo for $160k: This needs to get resolved. Can you get this refunded back?” and “this
6 really needs to get paid back.” She further noted that receipts would be required to verify these
8 32. Undeterred, on May 9, 2023, Kassan used MediaLink’s Wells Fargo account to
9 make another payment of $166,460.96 for his personal credit cards. Following this payment,
10 MediaLink’s seniormost finance exeuctive sent another email to Kassan stating: “Vickie just
11 flagged another $166,460.96. Given this is now almost half a million dollars, I am not sure how
12 you want me to handle … I cannot explain this balance in the balance sheet to UTA.” Again,
15 executive provide a breakdown of Kassan’s 2023 expenses and an assessment of whether they
16 were within the $950,000 “Special Expenses” cap. That executive provided a list of special
17 expenses that failed yet again to disclose the $486,469.96 used to pay Kassan’s personal credit
18 card debt. Ultimately, UTA uncovered these payments through its own diligence and began
21 wrote that, “I had hoped to advise you to pay this back ahead of sharing this summary but given
23 35. As a licensed California attorney with a background specializing in tax law, Kassan
24 knew or should have known that his actions were not in line with IRS requirements.
25 36. When UTA confronted Kassan about the $486,469.96 amount, Kassan admitted
26 that these company funds were used to pay his personal credit card bills. Incredibly, Kassan
27 claimed that he had “mistakenly” made these payments, despite the multiple and increasingly
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COMPLAINT
1 37. Kassan engaged in further flagrant breaches of his obligations to MediaLink and
2 UTA. For instance, Kassan permitted a MediaLink credit card to be issued to his wife, Ronnie
3 Kassan, despite the fact that she is not an employee of MediaLink or UTA. Mrs. Kassan used her
4 MediaLink credit card to purchase numerous luxury goods. While these luxury goods were
5 purportedly “business gifts” for clients and UTA colleagues, Kassan provided no receipts for these
6 purchases (contemporaneously or otherwise) and no rationale for his non-employee wife making
7 the purchases rather than a member of his large administrative staff. In addition, not only has
8 Kassan used MediaLink funds to pay for his personal driver, but improperly utilized company
9 monies to pay the rent for his driver’s apartment. Similarly, Kassan used company funds to
11 38. As the Chief Executive Officer of MediaLink, Kassan had the "responsibility to
12 manage the long-term strategy, day-to-day operations and staff of [MediaLink] and UTA
13 Marketing, and oversee the financial affairs of [MediaLink], consistent with and subject to the
14 applicable annual [MediaLink] budget mutually agreed upon by [Kassan] and UTA.” Despite
15 being charged with overseeing the financial affairs of MediaLink, Kassan failed to adhere to any
19 39. During the pendency of UTA’s review of Kassan’s expenses, Kassan’s subordinate
21 via MKI) receive $200,000 of equity in a startup entity in exchange for $150,000 of free
22 MediaLink services and $50,000 of cash from Kassan individually. Kassan’s subordinate
23 subsequently instructed the employee that the “equity component is being removed for simplicity”
24 or words to that effect - yet the free services were still going to be provided. While Kassan now
25 claims “no transaction occurred” with respect to the startup, the fact that Kassan would attempt to
26 utilize MediaLink services as “currency” for equity to be kept for himself or MKI – during an
27 ongoing review of his conduct – underscores Kassan’s tendency to operate within “gray areas” and
28 to usurp corporate opportunities and resources for his own personal gain.
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COMPLAINT
1 40. On information and belief, Kassan engaged in unauthorized business activities
2 outside of MediaLink and UTA, in violation of his obligation under the Agreement to devote his
3 “full business time, best efforts and skills to the performance” of his duties to MediaLink.
4 41. On March 7, 2024, Kassan was terminated for “cause” pursuant to the Agreement.
7 42. Plaintiffs re-allege and incorporate herein by reference the allegations contained in
8 the preceding paragraphs with the same force and effect as though fully set forth herein.
9 43. Kassan, as Chairman, President, Secretary, and CEO of MediaLink and a partner of
10 UTA, maintained a fiduciary and confidential relationship with Plaintiffs in that Plaintiffs had
12 44. Kassan had a duty to keep Plaintiffs informed. Kassan had a duty not to lie or
14 45. Kassan breached his duties to Plaintiffs by the actions identified above.
15 46. Kassan, in submitting or causing his finance team to submit inaccurate and/or
17 Plaintiffs, expressly and implicitly, represented that the expenses for which he was seeking
18 reimbursement were legitimate business expenses incurred on behalf of Plaintiffs when, in fact,
19 egregious portions of those expenses were incurred for the benefit of Kassan personally and had
22 Kassan’s other representations as alleged above, express and implied, were false.
23 48. Kassan knew his representations were false at the time he made them.
24 49. Defendant Kassan intended that Plaintiffs would rely on his false statements at the
26 50. Plaintiffs reasonably relied on Kassan’s representations by, among other things,
27 reimbursing him for substantial expenses claimed by Kassan even though, without Plaintiffs’
28 knowledge, those expenses were not in fact legitimate business expenses incurred for Plaintiffs’
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COMPLAINT
1 benefit but were, in truth, personal expenses for the benefit of Kassan personally. Plaintiffs also
2 reasonably relied on Kassan’s representations and omissions by allowing him to continue his
3 partner services for Plaintiffs when, had it known the true facts that Kassan misrepresented and
6 were harmed and damaged in an amount not yet fully determined and to be proved at trial and in
8 52. Defendant Kassan’s conduct was fraudulent, willful, oppressive, and malicious.
16 55. On or about December 15, 2021, Kassan entered into the Agreement, a valid and
17 binding contract enforceable in accordance with its terms.
18 56. Plaintiffs have done all, or substantially all, of the significant things required of
19 them pursuant to those contracts.
20 57. To the extent, if any, that Plaintiffs have failed to fulfill any duty under the
21 Agreement, that failure was and is excused by Kassan’s misconduct and/or failure to perform his
22 contractual obligations.
23 58. All conditions required by the Agreement for Kassan’s performance under the
24 Agreement have been satisfied, waived, or excused by Kassan’s own misconduct and/or failure to
26 59. Kassan has breached the Agreement in the manner alleged above.
27 60. Kassan’s breaches have caused Plaintiffs to suffer damage and harm, and Plaintiffs
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COMPLAINT
1 THIRD CAUSE OF ACTION FOR BREACH OF FIDUCIARY DUTY
2 (By Plaintiffs Against all Defendants)
3 61. Plaintiffs re-allege and incorporate herein by reference the allegations contained in
4 the preceding paragraphs with the same force and effect as though fully set forth herein.
5 62. By virtue of his role with Plaintiffs, Kassan owed Plaintiffs fiduciary duties.
6 63. By engaging in the conduct alleged above, Defendant Kassan breached his
8 64. As a result of Kassan’s breach of fiduciary duty, Plaintiffs were harmed and
9 damaged in an amount not yet fully determined and to be proved at trial and in excess of the
18 68. By virtue of his role with Plaintiffs, Kassan owed Plaintiffs a duty of loyalty.
19 69. By engaging in the conduct alleged above, Kassan breached his duty of loyalty to
20 Plaintiffs.
21 70. As a result of Kassan’s breach of his duty of loyalty, Plaintiffs were harmed and
22 damaged in an amount not yet fully determined and to be proved at trial and in excess of the
27 / / /
28 / / /
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COMPLAINT
1 PRAYER FOR RELIEF
2 WHEREFORE, Plaintiffs pray for judgment against Defendants as follows:
12 5. For such other relief as the Court may deem just and proper.
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Bryan J. Freedman
18 Sean M. Hardy
Attorneys for Plaintiffs
19 United Talent Agency, LLC and Media Link,
LLC
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COMPLAINT