Lawyers for the new owner of an area marketing firm say a rogue former employee is causing irreparable damage to the business by stealing clients and strategies.
Xiingo.com last year announced the purchase of Alison South, the Augusta-Aiken advertising agency with offices in Chattanooga, Tenn. and Fort Lauderdale, Fla., for an undisclosed amount.
Under an equity purchase agreement, then-Alison South CEO and former co-owner Mike Thomas was to remain in leadership with the company, or not compete with it, for three years, according to court filings.
Thomas, represented by Charleston lawyer Charles George, has denied the bulk of the December allegations, filed by Xiingo in U.S. District Court for the Southern District, and demanded a jury trial.
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Thomas, his wife Ashley Thomas, former Alison South contractor Wesley Roberts and former Alison South CEO Kate Sanders, who took Thomas’ place in September, as well as Next Marketing LLC are named as defendants in Xiingo’s demand for a restraining order, injunction and damages for theft of trade secrets and civil conspiracy.
The complaint said Xiingo’s “plan for their future success was dependent on the commitment, loyalty and trustworthiness of Mike Thomas” and other key personnel.
But instead, “after cashing in on the sale of his business, Mike Thomas then set out on a calculated plan to destroy the very business he had sold to Xiingo and move as much value in that business to a new business, Next Marketing Group,” it said.
The complaint said besides agreeing not to compete, the defendants misrepresented during the sale Alison South’s financial position, such as not mentioning liabilities for paid employee time off.
Shortly after the purchase, the law firm that handled the closing informed Alison South it was terminating its account. In the months that followed, Alison South received termination notices from “dozens” of other clients, documents said.
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The complaint said Thomas and Sanders knew clients were leaving but didn’t disclose it. Clients that left included a local church, bank, roofing company and area private school and area dentist, attorney and insurance offices, it said.
The complaint cites text messages from a former employee’s company phone showing she and the defendants “were all working together” to take the clients.
In September, Thomas resigned, saying he was taking another job – with an Alison South client – but wanted to serve as a consultant for “a select group of clients.”
His new role would “retain about $1 million in revenue” and reduce the company’s salary overhead, it said.
Sanders was announced as the firm’s new CEO a few days later.
Susan McCord is a staff writer with The Augusta Press. Reach her at susan@theaugustapress.com
