LVMH, IDOL SETTLE DISPUTE
Byline: Eric Wilson
NEW YORK — John Idol and LVMH ended a four-month-long dispute over the former Donna Karan International chief executive officer’s severance package on Thursday, putting to rest an emotionally charged battle that led Idol to claim breach of contract in a lawsuit to recoup his promised $12.2 million.
Idol wouldn’t divulge any details of the settlement on Thursday, other than to say: “We have both amicably decided to move on with our respective lives.” However, sources along Seventh Avenue indicated that any adjustments to his original package were said to be “minor.”
In July, shortly after he left DKI, Idol was named ceo of Kasper ASL Ltd., taking over another troubled company that was in the midst of the difficult acquisition of the Anne Klein label.
Kasper has been operating under a prepackaged Chapter 11 reorganization plan since February. At the same time, Idol was embroiled in a conflict with his former employers at DKI, where he was ceo for the five years leading to its acquisition by LVMH Moet Hennessy Louis Vuitton in 2001, ultimately leading Idol to file a breach of contract suit against both DKI and LVMH in State Supreme Court in December.
Kasper’s Anne Klein unit released a statement on Thursday saying the contract disputes had been settled and quoting both sides as to having reached an amicable resolution.
“I am pleased with the outcome of my discussions with LVMH and, in particular, with Mr. Yves Carcelle,” Idol said in the statement. “I agreed to certain modifications of my employment agreement, which benefited both LVMH and myself+.Any misunderstandings we had with each other are behind us.”
An LVMH spokesman confirmed the settlement and quoted Yves Carcelle, head of LVMH’s fashion and leather goods division, as saying “LVMH is pleased to have reached an amicable agreement with John and his employment contract.”
Idol had filed his suit in an effort to claim the $12.2 million severance payments that were detailed in the companies’ merger agreements filed with the Securities and Exchange Commission at the time of the acquisition. LVMH had claimed that its dispute with Idol concerned “his performance under his contract,” but would not elaborate on why it was withholding payments.
Idol’s four-year tenure at DKI was marked by both a dramatic expansion through licensing that helped offset royalties paid directly to the designer and a brief flirtation with profitability, but there were also rumors of intense friction with Karan over creative and personnel issues. There was also a lot of animosity within the company toward Idol that while the bottom line improved, DKI’s stock price did not.
During the transition from a publicly traded company to a division of LVMH, DKI also reported significant losses and said that it had substantially reduced or eliminated bonuses that were promised by Idol to top management, many of whom were divisional heads he had brought on board. Idol also left DKI earlier than expected under his contract, when LVMH named Pino Brusone as the brand’s new ceo, but he negotiated a deal with its board to resign without affecting his compensation package.