Actress Lindsay Lohan and her brother have been hit with a $60 million lawsuit in connection with a shopping app that enables users to shop the virtual wardrobes of celebrities, after being served with a cease and desist letter from tech entrepreneur Fima Potik in September, who recruited the siblings to help promote his project.
According to Potik’s suit, which was filed in the New York Supreme Court last week, the Lohans entered into an agreement with Potik to collaborate on his startup, Spotted Friend, and then subsequently launched, Vigme, a competing company. Moreover, the suit alleges that Lindsay Lohan signed off on confidentiality, non-disclosure and non-compete clauses in her deal with Potik, and was provided access to Spotted Friend’s most sensitive trade secrets. She and her brother then worked “surreptitiously to use [Potik’s] business plan and proprietary information as a blueprint to form Vigme, which is an online shopping community and interactive web and mobile-based marketplace that is identical in nearly every aspect to Spotted Friend.” And in case that’s not enough, they also allegedly poached advisors from Spotted Friend, such as publishing giant, Arianna Huffington, and taking them at Vigme.
Potik’s lawsuit states claims of breach of contract, breach of fiduciary duty and loyalty, misappropriation of trade secrets and unfair competition, and is seeking an array of damages, as well as a permanent injunction, which would prohibit the launch of Vigme altogether. While the case is still in the beginning stages, Potik has been awarded a critical early victory. As of late last week, Saliann Scarpulla, the judge presiding over the case, accepted his motion for a temporary restraining order, thereby, immediately prohibiting the Lohans from further developing and promoting their competing app for a relatively short amount of time (likely until the court can rule on Potik’s temporary injunction).
The Lohans’ counsel, Ravi Batra, claims the judge’s finding is inappropriate, as Potik was never able to develop Spotted Friend to the point where he could launch it beyond creating a web page. Moreover, according to the New York Post, “Batra said the Lohans were fraudulently induced by Potik — ‘a rich spoiled little kid who can hire good lawyers’ — to sign a contract that tied them to work for Spotted Friend. Batra said Potik broke the contract by not producing a final product — the app to launch the site.”
More to come …