Kim, Kourtney and Khloe hit with Kardashian Beauty breach of contract lawsuit
The Kardashian sisters have been hit with another lawsuit. This time, two of their business partners are claiming that the reality TV stars breached their contract and committed fraud because they didn’t do enough to promote their beauty line, Kardashian Beauty.
Hillair Capital Management and Hillair Capital Investments filed a lawsuit Monday accusing Kim Kardashian, Kourtney Kardashian, Khloe Kardashian and their respective personal loan-out companies for not promoting their Kardashian-branded beauty products after the plaintiffs “put up millions of dollars” to help “salvage their struggling ‘Kardashian Beauty’ makeup line” after their former distributor, Boldface, “went belly up,” according to court documents filed in Los Angeles County Superior Court.
Hillair claims it rescued their Kardashian Beauty line -- formerly named Khroma -- from financial ruin in July 2014 when Boldface tanked. Hillair said it bought out Boldface, spending about $10.2 million to revive the Kardashian-branded products, but the sisters never fulfilled their end of the agreed-upon term sheet.
The investment management firm and fund are seeking their original $10-million investment and lost equity interest in the company, ranging between $64 million and $180 million, the lawsuit said.
They also claim that the essence of their bargain was that Hillair would fund the continued distribution of the line and the Kardashians would continue to be its face and “actively promote, market and support the line” to their massive social media following.
“The Kardashians’ support was, of course, absolutely essential to the success of the Kardashian-branded line and was a fundamental premise of the parties’ bargain,” the lawsuit said.
Hillair is claiming that shortly after they struck a deal, the sisters instead courted new potential investors to buy out Hillair’s stake in the company.
“In short: The Kardashians wanted a better, more lucrative deal than they had struck with Hillair after the money to continue the line was already committed, and they used their ability to withhold their support of the line to attempt to force Hillair into a buyout of its interest,” the documents said. None of those deals materialized, Hillair said.
The company also calls out Kim Kardashian West for lending her name “Kim K W” to a lipstick in makeup artist Charlotte Tilbury’s cosmetics line and claims that Khloe Kardashian “publicly disparaged” the beauty products during an exhibition in Dubai last May.
As recently as February, the E! reality stars threatened to walk away from the deal and take their trademark with them.
However, the sisters’ attorney, Michael Kump, dismissed the allegations and accused Hillair of mismanaging the company.
“This complaint is an obvious attempt to create leverage by hedge fund operators who took over the Kardashians’ cosmetics brand,” Kump said in a statement to the Los Angeles Times. “The Kardashians have suffered enormous damages as a result of the many failures and breaches created by the operator’s mismanagement of the company. The lawsuit is a disgrace. It is a jumble of false accusations which will be exposed as lies.”
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