CVSL Responds to Longaberger Lawsuit
10/18/2015
October 14, 2015 -- CVSL Inc. and its subsidiary, The Longaberger Company, filed a motion to dismiss Tami Longaberger's lawsuit seeking repayment of $1 million in loans she made to the company. CVSL seeks to settle the issue in binding arbitration, alleging that Ms. Longaberger's claims fall within the arbitration provision of her employment agreement with CVSL. CVSL also alleges that Tami Longaberger damaged the company "far in excess" of the $1 million she is seeking, accusing her of "breach of fiduciary duty, fraud, negligence, conversion, misappropriation of company funds, civil theft, breach of contract, and misappropriation of trade secrets."
Tami Longaberger joined the company her father founded in 1984, became president in 1994, and had led the company since the death of her father in 1999. She alleged in termination letters that after acquiring the company, CVSL reduced her salary and responsibilities, gave another executive authority over her and failed to pay taxes to several states, resulting in some seeking payment from her personally. She made three loans to the cash-strapped company in 2014, which she claims were to be repaid in June and July of this year.
CVSL stated in June that it had terminated Ms. Longaberger because she had an inappropriate relationship with a subordinate, refused to work with the sales field and rarely showed up at the office. John Rochon Jr. took over as Longaberger chairman, president and CEO following her departure.