Investors in the high-end denim brand Imogene + Willie have attempted to force the company into bankruptcy after allegations of fraud committed by the company’s founders, The Wall Street Journal reported Wednesday.
The move for new leadership stems from a $1.5 million cash investment misspent by Imogene + Willie’s founders Matt and Carrie Eddmenson, who allegedly used the money to fund a lavish lifestyle while neglecting important deadlines—key for sustaining a wholesale business.
In the wake of this news, the company faces a slew of related problems. According to the same Wall Street Journal article, over 60 percent of the company’s bills, amounting to over $230,000, are more than 90 days overdue. Stores in Nashville, Tenn. and Portland, Ore., meanwhile, lack merchandise in stock, while Anthropologie cut back on its order after not receiving shipments on time.
The charge for new leadership is lead by Robert Lamey and wife Paige Heid, who invested $1.5 million in the company in July 2013, buying them a 46.5% stake. The couple tried to push the company into chapter 11 protection by filing an involuntary petition—giving the company 20 days to respond.
Former Chief Financial Officer, Celia Highes, placed the blame of the company’s financial problems on the Eddmensons’ “irresponsible spending.” Hughes goes further to say that she saw the couple spend company money on spa visits, a $10,000 motorcycle and on shopping trips at Barneys and J. Crew, according to court papers. The papers also stated that the couple gave themselves raises.
The Eddmensons have yet to respond to the chapter 11 request.