COURT DISMISSES CHARGES AGAINST DONNA KARAN CO.
Byline: Jeff Siegel
NEW YORK — A state court judge has dismissed charges by the former chief financial officer of The Donna Karan Co. that the fashion house was guilty of slander and fraud when it fired the executive in April 1994.
In an 18-page decision, however, Justice Walter M. Schackman ruled that the executive, David M. Golden, was entitled to two months’ salary, or roughly $53,000, on a breach of contract charge.
Golden sued his former employer, plus company principals Donna Karan, Stephan Weiss, Frank Mori, Tomio Taki and Takihyo Inc., for $60 million last May, claiming he was illegally fired for disclosing negative financial information about Donna Karan Co. to lending institutions and for refusing company requests to conceal the company’s true financial condition by inflating sales figures and hiding from auditors a $1 million invoice.
Donna Karan Co. denied the charges and alleged in a countersuit that Golden was fired for his “dereliction of duty and gross negligence” in preparing a contingency plan involving the placement of debt.
Golden’s charge of slander in the Manhattan State Supreme Court suit, stemming frombeing escorted by five security guards from Donna Karan’s offices to his own office a block away the day he was fired, was dismissed. Justice Schackman ruled that “the mere escorting of [Golden]…could not have been a defamatory communication to the casual observer” because a casual bystander could not have known the reason for Golden’s termination.
On the fraud charge, relating to Golden’s assertion that Karan lured him away from Hugo Boss by misrepresenting the company’s financial condition and promising him an equity stake, Justice Schackman wrote that Golden’s claims “do not support a claim for fraud since the oral promises were not enforceable and no justifiable reliance could have been placed thereon.”
Golden’s attorney, Mel P. Barkan, said Golden is weighing an appeal. A spokesman for The Donna Karan Co. said, “We believe the judge’s decision speaks for itself.”