ICN Chief Accused of Harassment : Lawsuit: Ex-employee says Milan Panic demanded sexual favors, fathered her son. Company spokesman denies the allegations.

SANTA ANA — A former ICN Pharmaceuticals Inc. employee alleges in a lawsuit filed Tuesday that ICN chairman Milan Panic demanded sex from her during a business trip and fathered her child before forcing her from her job last October.

Debra Levy, in a civil suit filed in Orange County Superior Court, seeks unspecified damages from Panic and ICN in connection with alleged sexual discrimination and harassment during nearly a decade with the company.

Panic “emphatically denies” the paternity and harassment charges, ICN spokesman Doug Schoen said.

“It just isn’t true,” Schoen said. “This is a desperate allegation by a desperate woman.”

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ICN attorney David Watt suggested that Levy’s suit was filed “in apparent retaliation” to a suit filed on Monday by ICN, which alleges that Levy fraudulently used a company credit card to ring up more than $20,000 in bills before resigning in October.

Levy “is seeking financial gain and a way out of the very deep trouble she has gotten herself into,” Watt said. “In doing so, she is putting at risk the reputation of a senior executive, who denies the allegations, to achieve that aim.”

Levy could not be reached for comment.

The sexual-harassment lawsuit is the second in two years against Panic, the high-profile Orange County businessman who, in 1992 served briefly as prime minister of his war-ravaged homeland of Yugoslavia. Panic has been at the helm of ICN, a Costa Mesa-based pharmaceutical company, since founding it in 1960.

In July, 1994, former ICN employee Colleen James alleged that Panic verbally abused her by repeatedly propositioning her in the firm’s Costa Mesa office and ultimately fired her over his unwanted advances. Panic denied those allegations at the time. Terms of a November, 1994, out-of-court settlement were not disclosed.

Levy’s suit alleges that the harassment started immediately after she began working as a secretary to Panic in 1986, the year after she joined the company. Initially, the suit alleges, Panic touched her in unwanted ways and started demanding sex.

Later that year, according to the suit, Panic asked her to accompany him on a business trip to organize presentations and other business activities, telling her “this trip would teach her a lot about the business.”

Levy alleges that Panic again sought to have sex with her during the trip and that she complied after “repeated requests.” She alleges in the suit that she became pregnant as result of those relations, giving birth to a son in 1987.

According to the suit, there has been no “judicial resolution” to a paternity suit brought by Levy in 1990, although Panic has allegedly been making child-support payments.

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Levy alleges that Panic continued to pressure her into sex at his office and on his yacht from mid-1986 to the beginning of 1992, and that she believed her job would be affected if she stopped having sex with him.

She alleges that she refused his advances when he returned in March, 1993, from Yugoslavia, and soon after was denied “meaningful work assignments.” The suit said she was terminated Oct. 14, 1994.

Schoen denied that Panic or other ICN executives stymied Levy’s career opportunities. Levy “did have advancement opportunities, through the course of ordinary business,” Schoen said. “She was a meeting planner, a coordinator, and a secretary. She did work part time in (Panic’s) office, but that was by no means her only job.”

The company’s lawsuit against Levy, filed in Superior Court, alleges that Levy failed to turn in a Visa credit card when asked and instead continued to ring up purchases. Levy, the suit alleges, owed $20,0681.23 when she left the company but “had no intention” of paying the bill.