The lawsuit that Michelle Ochs filed against the brand she co-founded back in 2008 with then-design-partner and fellow Parsons graduate Carly Cushnie has come to a close after Cushnie LLC failed to respond to the complaint. According to a default judgment filed by a New York federal court, Cushnie LLC is on the hook for $387,252, with the bulk of the sum – $360,000 – “representing monetary damages arising out of [Cushnie LLC’s] breach of the Settlement Agreement and Promissory Notes at issue in this action.”
The default judgment, which is dated August 28 and signed by U.S. District Court for the Southern District of New York Judge Naomi Reice Buchwald, brings the case to a close in Ochs’ favor (assuming, of course, that Cushnie LLC pays up) as a result of Cushnie LLC’s failure to respond to the summons to appear before the court in connection with the matter. As result, despite not participating in the proceedings, Cushnie LLC is now legally obligated to abide by the court’s ruling for default judgment, including the $360,000 sum plus an additional $17,514 for Ochs’ attorney’s fees and legal costs, and nearly $10,000 in interest.
Ochs first filed suit in June, accusing Cushnie LLC of failing to make good on its end of a settlement agreement the parties had entered into to resolve a “dispute” in August 2018, just months after Ochs somewhat “suddenly” stepped away (as Vogue out it) from the since-rebranded Cushnie et Ochs, the fashion company she helped build over a decade with Ms. Cushnie.
In furtherance of their 2018 settlement agreement, which came with a non-disclosure agreement, Ochs asserted that the Cushnie brand “agreed to make certain monetary payments to [her] over a two-year period,” which it did … until it didn’t. Ochs claimed that as of March 2020, when Cushnie LLC was “required to make a penultimate payment to [her] in the amount of $180,000 within ten business days of February 27, 2020 (i.e., on or before March 12, 2020),” followed by a “final payment in an equal amount within ten business days of August 27, 2020,” the company refused to pay up.
Ochs alleged in her complaint that in light of Cushnie’s alleged failure to pay the $180,000 sum in March, and its failure to respond to a formal demand from Ochs’ legal counsel regarding the missed payment, Ochs initiated arbitration of the dispute before the American Arbitration Association, a process that was allegedly set out in the parties’ settlement agreement. The issue was not resolved at that stage, as representatives for Cushnie “failed to appear, and the matter was deemed closed on May 18, 2020.”
After an unsuccessful attempt at arbitration, Ochs filed suit, setting forth two breach of contract claims – one for Cushnie’s alleged breach of the parties’ settlement agreement and the other for the breach the promissory note. However, instead of fighting the suit or agreeing to settle the matter out of court, Cushnie – which made headlines in June as one of the 36 companies on the receiving end of COVID-19 relief funding thanks to Vogue’s “Common Thread” initiative, as well as for its recent collaboration with Target – did not respond to Ochs’ suit at all, thereby, prompting in the court to hand down a default judgment.
The legal battle follows from a successful 10-year-long collaboration between the two thirty-something women, who met while enrolled at design school in New York, and formally launched their brand 2008 to rave reviews from New York fashion’s powers-that-be, from Bergdorf Goodman’s Senior Vice President of Women’s Fashion Linda Fargo to Vogue and the Council of Fashion Designers of America.
Best known for their creatively cut-out, bodycon dresses and subsequent expansion into knitwear and swimwear, as well as leather goods and footwear, the duo – who were long-praised for “knowing their customer” and steadfastly devoted their design sensibilities to creating flattering garments for her – amassed a list of big-name stockists and famous fans, including the likes of First Lady Michelle Obama, Beyoncé, Selena Gomez, Jennifer Lopez, Karlie Kloss, Gigi Hadid, and Blake Lively, among many others.
As for whether the case is actually over, TFL’s sources say that Cushnie LLC is not preparing to pay up, meaning that this may not be the last time that the court intervenes.
*The case is Michelle Ochs v. Cushnie, LLC (Formerly Known as Cushnie at Ochs, LLC), and Cushnie Holdings, LLC (Formerly Known as Cushnie at Ochs Holdings, LLC), 1:20-cv-04215 (SDNY).
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