Fusion Brands America Inc. slapped its former chief executive officer Caroline Pieper-Vogt with a lawsuit Wednesday, alleging that she violated her employment contract by disclosing confidential financial information and used the company’s funds for personal use.

This story first appeared in the November 18, 2011 issue of WWD. Subscribe Today.

Filed in New York Supreme Court, the complaint accused the former ceo of “mismanaging” the cosmetics company’s assets, “misusing” corporate funds for her personal benefit and “performing services” for companies not affiliated with Fusion, among other things. Pieper-Vogt, who resigned “unexpectedly” from Fusion on Oct. 28, claimed that she was entitled to “substantial severance pay,” according to Fusion, which said there was “no basis” for such an assertion.

Following her resignation, the former executive was allegedly on a mission to disrupt Fusion’s business and interfere with its relationship with its customers and other business partners.

The plaintiff said this was achieved by improperly disclosing the company’s confidential financials and spreading false rumors to key players in the market that Fusion is “insolvent and unable to meet its contractual obligations.”

Furthermore, said the suit, Pieper-Vogt, who started at Fusion on June 22, 2009, secretly misappropriated corporate opportunities belonging to the cosmetics company in connection with ID Beauty International Distribution LLC, a Fusion client.

The two firms entered into an exclusive sales agreement, which stipulated that Pieper-Vogt would personally own an equity stake in Fusion’s share of the joint venture. But Fusion said that Pieper-Vogt kept that quiet, omitting that critical detail to Fusion’s chairman, Eugene Melnyk.

The lawsuit called the act a “conscious act of impropriety, deliberately designed to remove an important asset from her employer and direct it to herself for the personal benefit,” which was “in essence nothing short of theft.”

Fusion seeks punitive damages of at least $10 million, as well as compensatory damages and attorneys’ fees. The plaintiff also seeks an injunction barring Pieper-Vogt from violating the nonsolicitation clause in her contract, from disclosing the company’s financial information and from trying to interfere with Fusion’s interactions and contracts with its customers.

The defendant was not available for comment Thursday.

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