BOCA RATON, FL: Westwood One is suing TransMedia Group, along with its client Pompano Helicopter, for $42 million, alleging that both parties attempted to injure the radio network's stock prices and reputation through a series of defamatory press releases.
The lawsuit arose over releases that TransMedia created as AOR for client and co-defendant, Pompano Helicopters, who was then embroiled in a legal dispute with Westwood One.
The complaint alleges that, “TransMedia Group was retained to make false statements about the Westwood lawsuit in order to manipulate Westwood's stock price.”
Tom Madden, TransMedia CEO and chairman, said the company is currently taking legal counsel and plans to defend itself against the charge. He added that it could have wide implications for the PR industry.
“When a large, powerful corporation can draw the messenger into a lawsuit, I believe we all have something at stake,” Madden said. “I really think this could have a chilling effect on all PR firms. . . We were merely reporting from public record on a lawsuit that our clients had filed against Westwood One.”
David Hillman, chief administrative officer and general counsel for Westwood One, declined to comment on specifics surrounding the case.
“We don't fight in the press, but in the courtroom,” he said. “The complaint speaks for itself.”
Westwood claims that press releases issued on October 29 and April 9 made false statements about the company's conduct and inflated lawsuit damages, causing a drop in its stock price and a loss of $42 million in market capitalization.
“[The April 9] press release was intended to scare Westwood's investors into believing that the Company faced an imminent trial for compensatory damages that could ‘exceed' its market capitalization,” the complaint states.
Neither Westwood One nor TransMedia has hired a PR agency to assist them in their current efforts surrounding the case.