Well here's a plot twist we didn't see coming.
After months of rumors that Tory Burch would file suit against her ex-husband and business partner Chris Burch because of brand similarities between C.Wonder and Tory Burch, Chris has gone and turned the tables and filed suit against Tory.
According to WWD, Chris filed a complaint alleging breach of contract, tortious interference (which is when a person intentionally damages the plaintiff's contractual or other business relationships) with the sale process, tortious interference with his business relationships with suppliers, and seeking a declaration from the Delaware court that the defendants cannot stop him from pursuing other business ventures (aka C.Wonder.)
Chris named Tory Burch, the person, as well as Tory Burch, the company, and a handful of unnamed individual Tory Burch board members in his suit. He is also filing suit against Isla Coral, a subsidiary of the Mexican private equity firm that took a stake in Tory Burch in 2009.
According to court documents, he is seeking "unspecified compensatory damages" and "appropriate injunctive and equitable relief, including but not limited to removal of Ms. Burch and the dominated directors from the board and the appointment of new and additional directors to the board to protect the interests of plaintiffs." Which sounds a lot like he's looking to push Tory out of her namesake company.
The WWD article is very long and detailed (and contains a lot of legal parlance, which, to be frank, kind of makes our head hurt), so here is the gist of what Burch is alleging in the suit:
Here's the gist of what Chris Burch is alleging in his suit:
• Tory Burch's trademark allegations against C.Wonder are unfounded because they rely on "functional and commonplace style elements such as ‘green carpets’ and ‘brass buttons’ that are neither owned by Tory Burch LLC nor recognized by the consumer public as distinctively identifying Tory Burch LLC." Chris Burch added that Tory Burch had been aware of the C.Wonder launch and branding strategy and only took fault with it after the company began garnering media attention.
• The unfounded trademark allegations, along with Tory Burch's alleged interference with shared suppliers have interfered with C.Wonder's ability to operate a business
• Tory Burch has also interfered with his other brands, including luxury accessories brands Monika Chiang (Burch's new girlfriend's label) and denim brand Electric Love Army, by contacting suppliers to supposedly confirm they are not doing business with Chris Burch
• Tory Burch has prevented, or at least manipulated, the sale of Chris Burch's stake in the Tory company by demanding third-party bidders buy him out only on the condition that the two ex-spouses reach an agreement about their joint and separate business ventures.
Chris also claimed that he had wanted to avoid a lawsuit but when Tory Burch, the company, allegedly refused to mediate on the terms of agreement, he decided legal action was necessary.
His lawyer, Andrew Rossman at Quinn Emanuel Urquhart & Sullivan, said: "Mr. Burch reluctantly filed this action to ensure he will receive fair treatment as one of the two largest shareholders of Tory Burch LLC, a business he cofounded."
A spokesman for Tory Burch LLC, on the other hand, said: "Former board member Chris Burch has decided to take a business transaction to the courts. We believe his claims and assertions are totally without merit."
Needless to say, this will all make for a very interesting day in court...