CaaStle Inc., the fashion-tech platform once poised to revolutionize how consumers rent clothing, is now in free fall – and it is pointing the finger at its founder and former CEO. In its answer to the lawsuit waged against it by Express-owner EXP Topco, LLC in New York Supreme Court, CaaStle has not only denied any wrongdoing but has taken the extraordinary step of cross-suing Christine Hunsicker, who founded – and until recently – was running CaaStle, which is now teetering on the edge of bankruptcy, having secured a $2.75 million bridge loan, implemented temporary staff furloughs, and seen its board openly weigh liquidation.
The Background in Brief: EXP filed suit against CaaStle and Hunsicker in New York Supreme Court in April, alleging that the company and its founder infringed the EXPRESS trademarks and breached multiple agreements related to the “Express Style Trial” rental platform. After initially negotiating a license deal for CaaStle to continue using the EXPRESS brand, complete with multi-million-dollar guaranteed royalties, EXP claims that the company abruptly walked away. A subsequent settlement agreement, intended to resolve the dispute, also fell apart when CaaStle failed to make its required payment, citing an absence of funds.
Corporate Dealings & Crossclaims
In its June 9 answer, CaaStle does more than dispute the allegations waged against it; it seeks to reroute liability squarely onto Hunsicker herself. Specifically, CaaStle sets out a pair of crossclaims, in which it alleges that any harm suffered by EXP stems not from corporate policy or action but from Hunsicker’s individual conduct. The 14-year-old startup contends that Hunsicker – who resigned as CEO on April 1 following internal accusations of financial misrepresentation – is solely or largely responsible for the acts at the heart of the EXP lawsuit.
The crossclaims assert that Hunsicker engaged in conduct that, if EXP’s claims are substantiated, would amount to breaches of contract, trademark infringement, and unjust enrichment. At the same time, CaaStle argues that it will be “damaged thereby” if held liable and that Hunsicker must bear those legal and financial consequences. The company also seeks recovery of legal costs and attorneys’ fees tied to any potential judgment.
This internal split comes on the heels of CaaStle’s board publicly accusing Hunsicker of misrepresenting key financial and operational data to both the company and outside investors. Those accusations form the foundation of another pending lawsuit, filed by fashion-focused investment firm P180, which claims it was duped into investing in CaaStle based on “one of the largest frauds in history.” That complaint alleges that CaaStle’s technology was unscalable, its subscriber base fictionalized, and its internal financial condition dire – all while Hunsicker assured partners and investors of stability and explosive growth.
CaaStle’s Legal Strategy
Though Hunsicker is not named as a defendant in the P180 lawsuit, she is at the center of CaaStle’s new claims in the EXP case, a move that signals a strategy by the ailing company to isolate liability, distance itself from its former leadership, and potentially lay the groundwork for a post-Hunsicker restructuring. Taken together, the EXP and P180 lawsuits sketch the outline of a company in collapse, beset by misrepresentations, broken deals, and growing litigation risk.
The unfolding legal battles mark a dramatic fall for a company once heralded as a pioneer in the clothing rental space. CaaStle’s trajectory – from a promising tech-enabled platform with high-profile retail partners to a distressed startup mired in lawsuits and leadership scandal – underscores the volatility of fashion-tech ventures operating at the intersection of logistics, branding, and consumer trust. As courts begin to weigh the merits of the claims and counterclaims, the cases will be closely watched for how accountability is apportioned in startups where the line between founder vision and operational oversight often becomes significantly blurred.
The case is EXP Topco, LLC v. CaaStle Inc., et al., 652221/2025 (N.Y. Sup. Ct.).
Share
