Omnicom Obtained Warranty, Insurance Indemnifying Ascential Liabilities

Omnicom has obtained a “buy-side warranty” and indemnity insurance protecting it from potential liabilities associated with its $900 million purchase of the Flywheel Digital ecommerce assets of Ascential plc, according to a document sent to Ascential shareholders as part of its regulatory compliance.

The document says the warranty and insurance are in addition to “customary warranties, indemnities and other contractual protections given by Ascential," which are all “in favor” of Omnicom.

While the disclosure states “there are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which Ascential is aware)” during the past 12 months, the core foundational digital commerce assets in Omnicom’s acquisition deal, Flywheel Digital, has been the subject of both a two-year federal suit (on appeal in the Fourth Circuit Court of Appeals) and a Maryland state theft of trade secrets suit (stayed pending the federal appeal) by Compass Marketing, which alleges Flywheel executives stole the core foundational digital technology and trade secrets, and other charges.

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“Given Duncan Painter's announcement and intention to continue to control the digital assets after the sale to Omnicom and his intention to continue to benefit personally even after the sale as an employee of Omnicom we do plan to name Omnicom and Duncan Painter as co-defendants,” Compass Marketing Chairman-CEO John White told MediaPost.

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