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Am. Express strikes back
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October 29, 1997: 8:39 a.m. ET
Company files suit against former chief, associates of regional office
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NEW YORK (CNNfn) - American Express Co.'s Financial Advisors unit has launched an attack of its own against the former chief and several associates of its biggest regional office, less than a week after they resigned.
According to The Wall Street Journal, the company filed a lawsuit Tuesday in a Detroit federal court accusing the former workers of breach of contract, libel and misappropriation of trade secrets.
The lawsuit accuses John R. Hantz, a former group vice president at the unit, of conspiring with dozens of former financial advisers at American Express to raid its Detroit market group and threaten employees with physical force, the newspaper said.
American Express said Hantz and others illegally took company computers and confidential client files, destroyed company databases and kept the firm's Detroit employees from entering its offices.
The company is asking the court to grant a temporary restraining order requiring the former employees to leave the offices, return the files and computers andnot to solicit any current employees or clients.
Sue Ellen Eisenberg, Hantz's attorney, told the newspaper the claims are meritless and said the lawsuit is intended solely to tarnish Hantz's reputation.
Hantz and 83 of the region's 400 financial advisors resigned last week to form a new money-management firm, Hantz & Associates, that will directly compete with American Express in the Detroit area. The Detroit region is American Express' fastest-growing area, with $172 billion in assets under management. The region brought in one-third of the company's $524 million profit in the third quarter.
Hantz said he was starting his own firm to offer investment and insurance services not available through American Express. Hantz had negotiated with American Express for almost a year, trying to get the region more independence from the company. In the end, he was rebuffed.
American Express said Hantz resigned partly to avoid taking part in an investigation into "fraud, conflict of interest and sexual harassment." The company said it asked Hantz to discuss those allegations with them before resigning. Eisenberg said that Hantz did learn of the allegations before resigning, but that the charges are without merit.
The company also accuses Hantz and his associates of libel because of a press release they issued saying "product choices for investors were more limited at American Express than many advisers and planners would have liked." The release went on to suggest that Hantz's new firm would be better equipped to provide those services.
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