Tarrant Apparel Group and its subsidiary, Private Brands Inc., filed a cross-complaint in Los Angeles Superior Court against American Rag Cie LLC and American Rag Cie II for allegedly trying to improperly terminate a licensing agreement.
This story first appeared in the February 7, 2008 issue of WWD. Subscribe Today.
According to Securities and Exchange Commission filings from the company, the cross-complaint was filed on Feb. 1 for damages and equitable relief.
American Rag Cie II and Tarrant jointly own the “American Rag Cie” trademark through the American Rag Cie LLC company. They own 55 percent and 45 percent of the LLC, respectively. According to Tarrant “American Rag Cie” branded apparel was sold to Macy’s.
Tarrant alleged that the American Rag Cie LLC and American Rag Cie II tried to terminate the licensing agreement to get exclusive rights to the “American Rag Cie” trademark.
American Rag Cie II could not be reached for comment.
According to documents from Tarrant, the American Rag Cie companies sent Tarrant a letter alleging that it had failed to make royalty payments on time, which entitled them to end the licensing agreement. American Rag Cie also filed court papers seeking a declaratory judgment that the license agreement was breached and subsequently terminated.
Tarrant said that the termination notice was not valid, and therefore had no effect. Included in Tarrant’s cross-complaint were allegations of breach of contract, involuntary dissolution and breach of fiduciary duties. The company asked for a declaratory judgment, compensatory and punitive damages, a decree from the court dissolving the joint venture, and the costs of litigation.
Separately, Premium Denim LLC, which does business as Paige Premium Denim, filed a copyright and trademark infringement lawsuit naming Tarrant Apparel Group and Mervyn’s as defendants. According to documents filed in Los Angeles federal court, Premium Denim alleged that Tarrant and Mervyn’s manufactured and sold jeans that infringed on a number of its pocket stitching designs. The lawsuit was filed on Jan. 30 seeking permanent and preliminary injunctions in addition to financial damages.