updated 11/5/2007 11:01:31 AM ET 2007-11-05T16:01:31

A former Wal-Mart Stores Inc. ad executive says she won't refile a breach-of-contract lawsuit against the company. She also acknowledged that allegations of ethical breaches she made in her original suit, which was dismissed, contained inaccuracies.

In August, a judge threw out Julie Roehm's suit filed in Michigan, saying the matter should be heard in Arkansas, where Wal-Mart is based in Bentonville. With Roehm's decision to not refile, Wal-Mart spokeswoman Mona Williams said Monday the company would drop its countersuit against Roehm.

Roehm said she received no money from Wal-Mart, the world's largest retailer.

"I just decided not to pursue it," Roehm said in a telephone interview Monday. She wouldn't elaborate beyond a prepared statement that her lawsuit had wound up going beyond her effort to recover severance pay.

"Instead, the lawsuit has expanded into other issues, and has become more difficult and financially draining than I ever imagined," Roehm said in the statement.

The statement also said information exchanged among Roehm's lawyer, Wal-Mart, and businessman Irwin Jacobs revealed "the inaccuracy of certain allegations" about Jacobs and Wal-Mart Chief Executive Officer Lee Scott.

Roehm's initial suit sought up to $1.5 million and alleged Wal-Mart breached its contract with her. Wal-Mart filed a counterclaim accusing Roehm of having an affair with her subordinate Sean Womack and of accepting gifts and otherwise showing favoritism toward an agency that was lobbying for Wal-Mart's account. The suit also accused Roehm and Womack of trying to find a job with the ad agency.

In May, Roehm claimed in another court filing that Scott violated the company's ethics policy by accepting trips and discounts on yachts and jewelry from Jacobs, a wealthy entrepreneur who does business with Wal-Mart. Both Wal-Mart and Jacobs denied all of Roehm's claims. Jacobs sued Roehm for defamation.

Roehm said she is content to drop the matter.

"I have decided to accept Wal-Mart's decision to terminate my employment and move on. I am not receiving any money or other compensation to settle my case," Roehm said in the release.

Jacobs, in a statement released to The Wall Street Journal, said he feels vindicated by Roehm's statement and that he'll drop his counterclaim against her.

Roehm departed Wal-Mart in December 2006 after less than a year with the world's largest retailer. Roehm had been brought on to help the company promote more high-end merchandise, a move the company has since backed away from.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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