Christopher Burch is throwing down the gauntlet in what is shaping up to be a bitter and nasty lawsuit against his ex-wife Tory Burch.
On Tuesday, Chris and his companies J. Christopher Burch, JCB Investments and C. Wonder LLC filed a six-complaint lawsuit accusing his ex, Tory Burch LLC , Tory Burch board members and equity firm Isla Coral of stopping him from pursuing other business ventures and selling his stake in the company, amongst other things.
The lawsuit came about after both parties tried to settle their differences last month ahead of a deadline that would kill the sale of the company.
However, because Tory's demands were "too outrageous" and refused to enter mediation, Chris had no choice but to take legal actions to ensure he would be treated fairly as a shareholder.
There are two issues at the heart of the case: Burch's C. Wonder retail chain and discrepancy over trade dress or "certain distinctiveness, whether by physical appearance or packaging, in which there is sufficient similarity between two businesses that consumers may get confused".
In the beginning, Tory Burch didn't have a problem with C. Wonder, which he fully disclosed, until it started to attract media attention. That, according to the suit, is when the board of directors at TB began excluding him from meetings and other company affairs.
Also included in the filing was a copy of Burch's limited liability agreement with Tory Burch, that states "directors and members can participate in other business ventures, even if they compete with Tory Burch".
Chris argues C. Wonder is in no way competing with Tory Burch because of its lower price points. He even went out of his way to change the retail format so his ex would "cease interfering with the sale process."
As far as trade dress goes, Chris says those claims are bogus because the green rugs and brass buttons he intended to use neither belonged to Tory Burch or confused consumers.
But that hasn't stopped Tory from manipulating "third-party bidders into requiring as a pre-condition to any transaction" that he must reach an agreement with Tory Burch over the trade dress discrepancy.
Trade dress also played a big factor when Chris tried to sell his 28.3% stake in the company.
According to the suit, in February a potential bidder submitted a terms sheet that required the trade dress dispute be settled. In July, the same bidder met with Chris and admitted it was Tory Burch that wanted the written settlement.
By the time August rolled around the bidder changed his position once again after Tory allegedly contacted their reps and "berated them for not demanding a formal written settlement".
On the other side of the lawsuit is Chris' allegations of Tory Burch interfering with his other ventures, including accessories brand Monika Chiang and Electric Love Army denim by contacting suppliers and factories in China to "inform them of confusion between" both Tory and Chris' lines and to confirm they weren't doing business with him.
As a final blow, Burch took the opportunity in the court docs to belittle his ex-wife's business credentials because she had never run a company or ever worked as a designer.
He also adds that if it weren't for his initial $2 million invest, and additional funding he got through his own contacts, the company would have never gotten off the ground.
Sounds like this is going to be an explosive case if and when it gets to court.