Suit claims 2 made unauthorized attempts to sell Buck

By Jerry Geisel

NEW YORK — Unhappy with the ownership of Buck Consultants LLC, two recently departed top Buck executives — without authorization from the benefit consulting firm's parent — allegedly pursued deals with venture capitalists to sell Buck, according to a lawsuit.

The suit — brought by Affiliated Computer Services Inc., the Dallas-based technology giant that purchased Buck in 2005 — charges that the motivation behind the actions of Howard Fine, Buck's then-chairman of the board and an ACS senior managing director, and Christopher Michalak, then an executive managing director, was "simply for the reason that they personally would like to own Buck instead of ACS owning Buck."

Additionally, the suit charges that Messrs. Fine and Michalak communicated with other employees at New York-based Buck, one of the nation's oldest and largest benefit consulting firms, asking them to resign if ACS didn't sell to a venture capital group that included the two executives.

The suit, filed last month in New York state court, also charges the two made unauthorized disclosures of confidential and proprietary Buck information to outsiders "as part of their attempt to find venture capital financing for a purchase of Buck."

Through their statements and conduct, Messrs. Fine and Michalak, both of whom left the company last month, "falsely portrayed to the financial community, Buck employees and potentially, Buck customers and prospects that Buck ‘is on the auction block,'" according to the suit.

The suit claims the defendants' false statements will likely damage Buck's relationships with current and prospective clients, who might hesitate to do business if they believed Buck were for sale.

An ACS spokesman said the company will "pursue every available remedy we deem appropriate to address this situation."

ACS named David Bywater, formerly chief operating officer for ACS human resources outsourcing, as senior managing director-human capital management solutions, to replace Mr. Fine. Jan Grude, previously managing director of ACS/Buck's Canadian operations and now executive managing director at Buck Consultants, replaced Mr. Michalak. Both will be based in New York.

Mr. Fine's attorney, Susan Brune, a partner at Brune & Richard LLP in New York, said: "The allegations are untrue and without merit. Mr. Fine strongly denies any wrongdoing. This lawsuit is about attacking the good reputation of a man who worked tirelessly to grow Buck and ACS, and to ensure that Buck was well-managed and viable in the long term."

Mr. Michalak declined to comment.

The suit comes nearly two years after ACS, a $5 billion business process and information technology outsourcing company, announced it was purchasing Mellon Financial Corp.'s HR consulting and services unit for $465 million. The Mellon unit was composed largely of Buck Consultants and Unifi Network, a benefit consulting and outsourcing arm. ACS does not disclose Buck's revenue, though its suit against the ex-Buck executives describes Buck as the sixth-largest U.S. HR consulting company.

When the purchase was announced, ACS executives described it as one that would fill a key need for the company. While ACS was a giant in the business process and information technology outsourcing sectors, traditional benefit consulting and employee benefit plan administration was a hole it believed its purchase of the Mellon unit would fill.

At the time, Mr. Fine said he expected the integration of the Mellon unit to go smoothly because of the overlap in services provided by the two companies.

Others, though, say there have been strains in the relationship.

"There are cultural differences between an outsourcing firm and a consulting firm, and that can make a smooth integration difficult, especially when the consulting firm had a legacy of being independent," said Donn Bleau, national practice leader for benefits and outsourcing at Solomon-Page Group LLC, a retained executive search firm in San Diego.