Giorgio Co-Founder Sues in Effort to Dissolve Firm

Gayle Hayman, co-founder and partner of Giorgio Inc., has filed suit seeking to dissolve the well-known Beverly Hills fashion company, claiming her ex-husband has caused its net profits to plunge and has driven her from active participation in the firm.

In the latest of a series of lawsuits filed in Los Angeles Superior Court against her former husband of 20 years, Hayman is seeking appointment of a receiver to manage the $100-million-a-year company, known for its chic Rodeo Drive boutique and top-selling perfume.

Gayle Hayman, who owns at least a 49% stake in Giorgio, said the extra 2% of the stock that Fred Hayman received in trust as part of their divorce settlement in 1983 has allowed him to virtually exclude her from management and deprive her of income from the more than $90 million in assets she has tied up in the firm.

The suit claims the company has seen a 10% increase in its gross profits over the past year, but under Fred Hayman’s management, has sustained a 46% drop in net profits, which Gayle Hayman said is costing her millions.

Cites Tax Liability

The suit also alleges that Gayle Hayman has been prevented from receiving any immediate income from Giorgio while accruing income tax liability of several million dollars a year on her share of the company’s revenue.

Many of the allegations were aired last month, when Gayle Hayman unsuccessfully sought a preliminary injunction to allow her to participate in management of the company, an outgrowth of extensive litigation between the two former spouses.

The new lawsuit seeks a court order compelling the sale of the company to a third party, an option which Gayle Hayman claims her former husband rejected when he turned down a $185-million purchase offer last year, or liquidation of its assets.

Disputes Claims

“Gayle Hayman has not been a part of Giorgio’s management for better than a year now, and this lawsuit is significant because it’s an admission on her part of the reality that she will not rejoin the management of Giorgio,” said Fred Hayman’s attorney, Marshall Grossman.

Grossman said Gayle Hayman’s claims about declining net profits are “factually inaccurate” claims that have already been rejected by the courts. “Her 49% ownership interest is recognized and respected,” he said.

“The basic dispute is her unhappiness about not being part of Giorgio’s management, and she has leveled one charge after another through a succession of lawyers and has lost at each and every turn of the road.”