UK cosmetics brand Lush has reportedly filed a lawsuit against its North American CEO and co-founder Mark Wolverton.
According to Canadian business media site biv.com, Wolverton has been confronted by the beauty giant over allegedly ‘breaching’ terms of their joint venture agreement laid out in 2003.
The Las Vegas-filed lawsuit is said to accuse Wolverton of financially mismanaging funds from Lush’s US operations, ‘funnelling money’ into the Canadian business, which he controls.
Among the claims, Lush reportedly alleged that Wolverton “outright refused to issue shareholder dividends despite that Lush would have been otherwise entitled to at least US$18m”.
Wolverton is also claimed to have “reduced excess cash by creating an unnecessary and bloated budget for capital expenditures; redefining payment terms to require the Lush US corporations to make payments to other entities upfront; and funnelling funds to his own pockets, and to those of his personal company, under the guise of management fees”.
He is also accused of blocking Lush, which owns 53.21% of the North American business, from appointing a Director and gaining access to financial documents.
Lush did not respond to Cosmetics Business’ enquiry.
