According to WWD, Fusion Brands America Inc. has filed suit against its former chief executive officer Caroline Pieper-Vogt alleging she violated her employment contract by using company funds for personal use and disclosing confidential financial information. The complaint which was filed in New York Supreme Court accuses Pieper-Vogt with “mismanaging” the cosmetic company’s assets and “misusing” corporate funds for her own personal benefit and use. It further alleges that Pieper-Vogt has “performed services” for companies not affiliated with Fusion, all in violation of her employment contract. Fusion seeks a minimum of at least $10 million in punitive damages, as well as compensatory damages and attorneys’ fees. Fusion is also seeking an injunction barring Pieper-Vogt from violating the non-solicitation 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.
Pieper-Vogt resigned from Fusion rather unexpectedly on October 28th and claims she is entitled to “substantial severance pay” which Fusion denies. Fusion alleges that following her resignation, Pieper-Vogt embarked on a mission to “disrupt Fusion’s business and interfere with its relationship with its customers and other business partners.” Fusion alleges that she achieved this by improperly disclosing the company’s financials and spreading false rumors to key players in the industry that Fusion is “insolvent and unable to meet its contractual obligations.”
Furthermore, the suit alleges that Pieper-Vogt, who started at Fusion on June 22, 2009, secretly misappropriated corporate opportunities belonging to the cosmetics company in connection with one of their clients, ID Beauty International Distribution LLC. Fusion alleges that Pieper-Vogt failed to mention to Fusion’s chairman Eugene Melnyk that the exclusive agreement entered into between the two companies gave Pieper-Vogt a personal equity stake in Fusion’s share of the joint venture. 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.”