NEW YORK — Brand Science LLC, an affiliate of Accessory Network Group that does business as LeSportsac, filed a lawsuit in State Supreme Court here against former owner Timothy Schifter and his new accessories company, Schifter & Partners, charging breach of contract.
The suit alleged Schifter violated the terms of a letter of agreement for a six-month nonsolicitation restriction after leaving LeSportsac. Schifter and other partners sold LeSportsac, the brand his family founded, to Brand Science and Accessory Network Group in November, reportedly for more than $100 million. Schifter & Partners, in which Gwen Stefani is a shareholder, was launched April 10.
According to the court documents, Brand Science “paid Schifter over $1.4 million and the consideration for that payment included Shifter’s agreement to refrain from any indirect or direct solicitation of any present, former or prospective customer of LSS [LeSportsac] brand products for six months after the termination of his employment.”
The complaint alleged that Schifter violated the agreement and began soliciting customers, such as Macy’s West, “almost immediately” after the contract was signed. Brand Science asked the court for a temporary restraining order against Schifter & Partners. It also asked for Schifter to return the money paid to him when the nonsolicitation agreement was signed.
The request for the temporary restraining order was denied at a preliminary hearing on Friday, according to Peter Bicks, partner in Orrick, Harrington Sutcliffe, which is representing Schifter in the litigation. A final hearing is being held today about Brand Science’s request for a preliminary injunction.
The lawsuit is an effort by Brand Science to keep a start-up business out of the marketplace, said Bicks. “It is an attempt to use the court system to try to advance specious claims to prevent somebody from getting their company up and running.”
The lawsuit is purely about the terms of the agreement, said Ken Landis, chief executive officer, Brand Science. “We’re not denying his ability to compete. His agreement was not to approach or solicit business from our customers.”
The allegations of the lawsuit include breach of contract, tortious interference with contract, tortious interference with prospective business advantage and breach of covenant not to impair goodwill. The lawsuit also asked for a declaratory judgment to relieve Brand Science of the remaining $167,000 it was to pay Schifter under the terms of the letter of agreement.
The court documents cited a number of allegations of solicitation of customers by Schifter and alleged that Stefani’s participation in a profile of Schifter & Partners that ran in WWD was also an example of a violation of the nonsolicitation agreement. “Because of Ms. Stefani’s stature as a pop icon and success with L.A.M.B., publication of her participation in [Schifter & Partners] was, upon information and belief, intended to solicit business for the defendant’s to [Brand Science LLC]’s detriment,” the complaint said.
Schifter was expected to file a response to the allegations late Tuesday.