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Estée Lauder sues Deciem founder Brandon Truaxe

Estée Lauder sues Deciem founder Brandon Truaxe
Deciem Co-Chief Executive Nicola Kilner, brand founder Brandon Truaxe and Estée Lauder Chief Executive Fabrizio Freda after Estée Lauder invested in the business last year. (WWD)

The Deciem drama is moving from Instagram to the courtroom.

The Estée Lauder Cos. Inc. has filed an injunction against founder Brandon Truaxe, following Truaxe’s announcement on Instagram that Deciem was shuttering operations. Truaxe posted an e-mail from the Lauder lawyer Mark Gelowitz on Instagram Thursday, which said the company is commencing injunction proceedings in the Ontario Superior Court of Justice.

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Lauder, which owns 28 percent of Deciem, is asking for Truaxe to be removed from the company, and for Co-Chief Executive Officer Nicola Kilner to be appointed the sole chief executive officer. The suit also asks for a judge to bar Truaxe from firing employees, communicating with employees or suppliers, posting to the Deciem social media account or acting as an employee of the company.

The public document also gives a glimpse of what has been going on behind the scenes of Deciem this year. It also asks for permission to hire PricewaterhouseCoopers LLP to investigate Truaxe’s allegations of “financial crimes.”

On Monday, Truaxe posted on Instagram that the company would close, saying, “This is the final post of Deciem, which we will shut down all operations until further notice, which is about two months…Please take me seriously…Almost everyone at Deciem has been involved in a major criminal activity, which includes financial crimes.”

Followers of Deciem — there are 374,000 on Instagram — have seen some of the the drama unfold publicly on the Internet, but the court papers say that in addition to announcing the closure of the company without consulting other shareholders on Monday, he also sent out a mass email that purported to fire Kilner and chief financial officer, Anand Khanzode.

On Tuesday, following Truaxe’s directions, most Deciem stores closed. Lauder asserts in the papers that Truaxe’s actions are “causing irreparable harm to Deciem’s business, and chaos and confusion for Deciem’s employees, customer, consumers, suppliers, landlords and other stakeholders.”

“This is not only causing irreparable harm to the Estée Lauder Cosmetics Limited’s investment in Deciem, but it is harming Estée Lauder’s reputation because Estée Lauder has an equity ownership in, and therefore an association with, Deciem,” Lauder said in the filing.

The documents go on to detail more of Truaxe’s unusual behavior, calling it “erratic, irrational, disturbing and highly offensive.” Truaxe has publicly posted internal emails, disclosed confidential information and unilaterally made the call to fire Kilner in February, which led to the resignation of former cfo Stephen Kaplan. She rejoined the business in July.

On May 9, Truaxe was detained by authorities in the U.K. and taken to a psychiatric hospital in London for several days, the papers said. He later stayed for three days at another psychiatric facility in Canada, according to the documents.

While Deciem brands remain shoppable online, stores have signs posted in the window that say, “Please don’t get mad. We are currently closed for an unforeseen concern.”

A spokeswoman for Estée Lauder said, “We can confirm we have commenced legal action in this matter. We cannot comment further on this pending litigation at this time.”

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