Many people know of LuLaRoe for its stylish clothing items. However, few may be aware that the company recently came under fire in a new lawsuit alleging it hasn’t been paying all of its bills lately. According to the lawsuit filed in a California Superior Court, LuLaRoe’s chief clothing supplier, Providence Industries, “is suing the company for nearly $49 million in a lawsuit claiming the multi-level marketing company has failed to pay its bills for seven months.”
Many people know of LuLaRoe for its stylish clothing items. However, few may be aware that the company recently came under fire in a new lawsuit alleging it hasn’t been paying all of its bills lately. According to the lawsuit filed in a California Superior Court, LuLaRoe’s chief clothing supplier, Providence Industries, “is suing the company for nearly $49 million in a lawsuit claiming the multi-level marketing company has failed to pay its bills for seven months.”
According to the suit, the clothing supplier believes LuLaRoe is actually insolvent and accused LuLaRoe founders, “Mark and DeAnne Stidham, of hiding assets in ‘shell’ companies to fund their ‘lavish lifestyle.’” The suit also alleges that “17 limited liability companies that are tied to the Stidhams were created between July and December 2017” and were used by the Stidhams to “purchase cars worth at least $2.7 million, properties in excess of $7 million, private planes, and other assets.” Additionally, the lawsuit argues that the 17 different limited liability companies “are part of a scheme to hinder, delay, and defraud the creditors.”
As if those allegations aren’t bad enough, the lawsuit further alleges that when Providence Industries representatives “confronted Mark Stidham in September 7, 2018 about bills past due, Stidham allegedly said, ‘Look guys, I am not going to pay you guys a f***ing dime unless a judge orders me to pay it, and DeAnne and I will take our two to three hundred million dollars to the Bahamas, and f*** everything.'”
What kind of other debts does LuLaRoe have, though, according to the suit? For starters, the plaintiffs claim that LuLaRoe owes $1 million to UPS “as well as more than $3.1 million owed to other manufacturers.” As a result, the company is facing “layoffs and an exodus of top sellers.” Since July, LuLaRoe has “lost more than one-third of its top performers, who generate the most revenue for the company.”
The company also has “hundreds of LuLaRoe sellers — who buy the company’s clothing at wholesale prices, then turn around and sell it to customers at a markup,” who have been waiting months for refund checks.
Representatives with the UPS have not responded to requests for comment, nor have LuLaRoe representatives. However, in an email statement issued recently to sellers, LuLaRoe said the allegations in the lawsuit “falls into the category of salacious, untrue, inflated and predatory claims targeted to strong arm LuLaRoe into an unreasonable settlement of their unsubstantiated invoices and claims.”
Sources:
LuLaRoe’s Clothing Supplier Is Suing the Company for $49 Million, and Says It’s Insolvent
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