Photo: Jemal Countess / Getty Images
Cosmetics company Fusion Brands is apparently really mad at its former CEO Caroline Pieper-Vogt, and is taking her to court, reports Iulia Filip at Courthouse News (via Forbes).Why? Because she cost the company millions through a bunch of shady practices, all while grossly mismanaging the company, alleges a lawsuit filed in New York County Court.
Here’s a summary of what she’s accused of. All of this is from the lawsuit:
- Awarded sweetheart contracts to personal friends
- Sold company assets (on non-competitive terms) in her own professional interests
- Used Fusion money to finance her own self-promotional ventures
- Inflated 2011 sales projections by 60%
- Disclosed confidential financial information after leaving the company (she quit in October under uncertain circumstances)
- Purposefully made false statements about Fusion’s supposed insolvency
That’s a pretty incredible list, but one anecdote stands out in the lawsuit, about why Fusion sponsored the Daytime Emmy awards, and how she supposedly circumvented internal checks.
Again, from the lawsuit:
“In early 2011, Pieper-Vogt proposed that Fusion spend approximately $500,000 to sponsor the Daytime Emmy Awards. Fusion’s sponsorship would allow Pieper-Vogt to attend the Emmy Awards in person and appear on the red carpet, which would further increase her visibility in the industry and which was Pieper-Vogt’s primary motivation for seeking to sponsor the event. At that time, Fusion was starved for cash as a result of Pieper-Vogt’s mismanagement, and Fusion’s executive committee, which was established to set strategy for the company, refused to authorise the expenditure. Mr. Melnyk, Fusion’s chairman and owner, denied Pieper-Vogt’s request, and specifically instructed Pieper-Vogt not to go forward with the event in view of the company’s more pressing financial needs.
Nevertheless, Pieper-Vogt persevered in her efforts for self-promotion. She falsely represented to Mr. Melnyk that the event had already been paid for, when in truth Fusion had not made payment. Pieper-Vogt planned to use money earmarked to pay Fusion’s suppliers to finance her pet sponsorship. In utter indifference to the company’s best interests, and contrary to instructions from the company’s chairman, Pieper-Vogt went ahead with the Emmy’s sponsorship, and caused Fusion to incur in excess of $500,000 in fees as a result. Pieper-Vogt arranged for Fusion’s finance department to pay the Emmy’s fee in a manner that circumvented Fusion’s internal spending limits by instructing finance personnel to write multiple checks and thereby concealed her unauthorised activity from Mr. Melnyk.”
Pieper-Vogt hasn’t yet made a public response to her ex-company’s allegations.
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