LuLaRoe's founders have been linked to 31 LLCs set up during the last 3 years - and a lawsuit alleges they're attempting to shield assets like a Gulfstream jet, a ranch in Wyoming, and a world-record-breaking supercar named Ruthie
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- A lawsuit alleges that LuLaRoe founder and CEO Mark Stidham and a number of associates are hiding money and assets in a web of LLCs.
- Stidham and his associates are connected to at least 33 LLCs set up between 2015 and the present day, according to documents reviewed by Business Insider. Thirty-one of these LLCs are still active.
- The majority of these LLCs also list LuLaRoe's Corona, California "hub" as a principal office.
- In its lawsuit, manufacturer Providence Industries claims a number of these LLCs are linked to assets such as a world-record-breaking car worth over $2 million and a lush ranch in rural Wyoming.
- "We believe the claims in this case are completely without merit and will fight vigorously against them," a LuLaRoe spokesperson told Business Insider in a statement.
LuLaRoe's manufacturer has filed a lawsuit against the legging empire, alleging that the company and its leaders are playing a shell game in order to avoid paying creditors.Providence Industries, LuLaRoe's clothing supplier, is suing its client for $49 million. The lawsuit alleges that LuLaRoe founders Mark and Deanne Stidham, along with their business associates and relatives, have transferred "substantial assets" to both themselves and their family members in order to support "lavish lifestyles" and avoid paying creditors.Advertisement
"We believe the claims in this case are completely without merit and will fight vigorously against them," a LuLaRoe spokesperson told Business Insider in a statement. "Given this is pending litigation, we cannot comment on the specifics."What's more, Mark Stidham submitted a sworn declaration to "address some of the patently false statements" in Providence Industries' filing. He said that the limited liability companies mentioned in Providence Industries' lawsuit were real estate and investment holding companies with "no nefarious or improper purpose."
Business Insider has reviewed documents linking LuLaRoe and its founders to 31 still-active LLCs established in the last three years. Two additional Wyoming-based LLCs - Varldspela LLC, which was filed on April 10, 2018, and Bradham Investment Holdings, which was filed on September 18, 2017 - were both dissolved on June 18, 2018.
Mark Stidham himself appears on the paperwork filed for some of these entities, but business associates and family members are mentioned in the majority of the LLCs.
A number of the LLCs attached to LuLaRoe and the Stidhams are linked to the business itself, according to documents reviewed by Business Insider.Advertisement
LuLaRoe, the Stidhams, and their associates are linked to 19 LLCs set up in December 2017 alone, according to a review of documents by Business Insider.
According to the lawsuit, some LLCs are allegedly linked to high-value assets, like Mark Stidham's two Koenigsegg cars.Advertisement
Ruthie blasted through a number of world speed records in 2017 — seemingly thanks in part to yet another LLC.
But those aren't the only cars that Stidham owns, according to the lawsuit.Advertisement
According to the lawsuit, the Stidhams also fly in a Gulfstream jet worth millions, thanks to an LLC filed in Delaware.
A number of the Stidham's LLCs are linked to specific properties, including an expansive ranch in rural Wyoming.Advertisement
A separate LLC reflects the address of a Wyoming-based plane hangar.
Some of the LLCs linked to LuLaRoe appear to have participated in land deals worth millions of dollars.Advertisement
Mark Stidham is also attached to an additional company called Hudsloan Enterprises Inc. LuLaRoe's former head of design and production, Patrick Winget, claimed in sworn testimony that Stidham asked him to help set up Hudsloan Enterprises because he had "bad credit."
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