Elizabeth Allan, who resigned as president and CEO of IABC in December 2000, has launched a defamation suit naming Louis C. Williams, Chicago counselor and former chairman of IABC, and IABC itself.

IABC has imposed a news blackout on the action, which was noted in its 2003 audit as a lawsuit that would be covered by the group's insurance policy.

Heidi Upton, senior manager of PR of IABC, refused to provide any details about the suit.

The suit is being heard in Superior Court of San Francisco. Depositions are currently being taken.

Allan, a 22-year veteran of IABC, resigned in late 2000 and was replaced on an interim basis by Williams, who heads L.C. Williams & Assocs., Chicago.

IABC in late 2000 announced it had encountered "a serious cash flow situation" that resulted in a freeze on staff pay raises; a cutback in travel and hiring; a delay in payments owed to chapters; dropping outside PR counsel, and delaying publication of the December/January issue of Communication World, its eight-times yearly magazine.

It said "payment terms" are being negotiated with suppliers.

Allan said in a statement that the "fundamental step" of reconciling bank statements had not been done and that the group learned on Oct. 19, 2000 that it had an unexpected "shortfall against plan of approximately $200,000."

"This happened on my watch and I accept that fact," Allan had said in a letter to chapter presidents.

She had been president and CEO of IABC five years.

She said she would take time off to travel with her husband and "re-invent myself." IABC at one point admitted it lost about $1 million on what was to have been an interactive business news and information website called "Talkingbusinessnow."