Drugs, Fake Birkins & Contracts: Naeem Khan Settles Lawsuit

Naeem Khan and his former creative director Lionel Geneste agreed to settle a breach of contract dispute brought by Geneste in Manhattan Supreme Court. Geneste, who worked for Khan from 2003 to 2006, claims he was unfairly terminated, for “becoming more associated with the Naeem Khan brand than Mr. Khan himself." Furthermore, Geneste alleges his former employer withheld hundreds of thousands of dollars in commissions, and made false and defamatory statements concerning Geneste to potential employers. According to Khan, Geneste was let go because of identity fraud: Apparently he was using his boyfriend’s social security number. Khan claims he gave Geneste 18 months to clear up the issue before eventually firing him.

As of today, the two parties settled suit, and Geneste will be paid $125,000, with 75 percent of that payment delivered by August 19. (Geneste initially sought $1.8 million six years ago when he first filed suit, but reduced that figure to $350,000 last week, Khan said). As for why Khan settled, the designer said: “The thing is, I have my collection to show Sept. 10. I want this to be over with."

According to WWD, an interesting hearing took place on Friday, in which, socialite Audrey Gruss and Khan’s former executive assistant Jessica Hoy gave Geneste all the credit for elevating the label. Hoy (who testified that Khan was “manic” and that she was “terrified” of him) also claimed to have seen Khan and his wife Ranjana snorting cocaine at a 2006 party (for Neiman Marcus' Fashion Director Ken Downing birthday) in the designer’s Soho loft. In addition to these claims, Geneste told the court that Naeem Khan tried to give a fake Birkin bag to Neiman Marcus' Renee Prince Fillip as a gift.