THE FASHION LAW EXCLUSIVE – Pyer Moss, the celebrated young brand, and its founder Kerby Jean-Raymond have been named in an ugly new lawsuit, in which Jean-Raymond’s former business partner, Rayon Baker, accuses him of an array of claims, including trademark infringement, fraud, breach of contract and unfair competition. The complaint, which was filed last month in New York federal court by Baker, states that the two parties started their venture in October 2012 when “Jean-Raymond solicited Baker to invest in [his] fashion company” – then called Gaud (and subsequently changed to Pyer Moss in December 2012).
According to Baker’s suit, “In order to induce [him] to invest money into Gaud, Jean-Raymond [fraudulently] represented he had previously worked for established designers, had ready buyers for his clothing line, such as Saks Fifth Avenue and Neiman Marcus.”
In exchange for Baker’s initial investment of $25,000, he received a 27.5% ownership of Guad, LLC – the company that owns the Pyer Moss fashion brand – and given the titles of manager, vice president and secretary of Gaud. Jean-Raymond, according to the lawsuit, “contributed a mere $3,000 capital contribution, but was granted a 72.5% membership interest in Gaud and was appointed manager, president, and treasurer.” And in accordance with their agreement, Guad, would own all of Jean-Raymond’s “original works of authorship, developments, improvements, designs, discoveries, trademarks, and trade secrets.”
In February 2013, after he made an additional investment of $10,000, Baker alleges that things began to go downhill. According to Baker’s lawsuit, Jean-Raymond filed to federally register the Pyer Moss trademark with the U.S. Patent and Trademark Office in his own name, as opposed to the business name. (Federal trademark registration was not granted, as the USPTO found that the Pyer Moss mark was too similar to an existing trademark filing for the word “Moss” in the same class of goods – clothing). And in July 2013, Baker claims that Jean-Raymond ceased all involvement with Guad and started a company of his own, PMAG, but continued to use the Pyer Moss name.
According to Baker, Jean-Raymond “misappropriated company property, and formed a new entity in direct competition with the [Guad’s] business and as a successor entity to Gaud,” thereby breaching his fiduciary duties to Guad – including but not limited to his duty to “exercise good business judgment, to act prudently in the operation of Gaud’s business, to discharge his actions in good faith, to act in the best interests of Gaud and its members, and to put the interests of Gaud before his own.”
And that’s not all. Baker asserts that Jean-Raymond is acting in direct competition with Guad as a result of his new venture. The complaint reads: “Substantially all of the clothes that were manufactured for Gaud LLC have been utilized by Jean-Raymond for PMAG’s benefit, including the camouflage leather jacket that was manufactured and designed for Gaud and was worn by a number of celebrities and fashion icons,” such as Rihanna – all in violation of the parties agreement. As a result, “Jean-Raymond has been unjustly enriched by his self-dealing, and usurped Gaud’s corporate opportunities and took advantage of its assets.”
So, what does Baker want? Well, he wants the to court to order Jean-Raymond to immediately and permanently cease his use of the Pyer Moss name. He also wants damages. Chances are, this will all be settled quietly out of court.
The lawsuit comes not long before New York Fashion Week, during which Pyer Moss is expected to show its Fall/Winter 2016 collection. It seems that everything is on schedule, as Jean-Raymond, who did not respond to a request for comment, tweeted this week that he plans to show the collection on February 13th. Moreover, the team is reportedly in the midst of working on a collection exclusively for e-commerce site, SSENSE. More to come …