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The New York Times is suing Madwell, the Brooklyn-based indie ad agency that has come under mounting financial distress after a dramatic legal fallout between its cofounders and what multiple current and ex-staffers describe as reckless spending by CEO Chris Sojka.
The complaint, which has been reviewed in part by ADWEEK, alleges that the agency owes the news publisher $37,176.38 plus interest for unpaid debts due for advertising services provided to Madwell or its “employees, agents, or representatives.”
The sum “has not been provided although duly demanded” by the New York Times, the complaint, filed in Brooklyn’s Kings County Supreme Court, alleges.
A spokesperson for the New York Times confirmed the lawsuit, but declined to comment further.
This is the latest in a string of dramas beleaguering the indie ad agency. Madwell is undergoing serious financial and cultural turmoil, as originally uncovered in a multiweek ADWEEK investigation. In light of ongoing liquidity issues that have impeded the firm’s ability to make payroll and pay vendors on time—even as Sojka allegedly spent lavishly with company funds—it has reportedly lost one of its biggest clients, Verizon, and furloughed an estimated 28% of its staff.
Meanwhile, Bank of America is looking to seize Madwell’s assets after the agency defaulted on loan payments worth more than $4 million.
Sojka, amid the drama, has attempted to explain his side of the story, offering ADWEEK an exclusive interview on the Adspeak podcast in which he sought to justify his purchase of a $17.5 million private jet and assigned blame for the agency’s financial strain to his ex-business partners.
The New York Times is represented by William J. McDermott of William J. McDermott LLP, which specializes in commercial debt collection, real estate, and estate and trust law, according to its website.
Madwell declined to comment.
