Joanna Van Vleck, the founder of The Trunk Club LLC, a formerly Bend-based online men’s clothing retailer that was featured last year on NBC’s “The Today Show” and in other national media, has been sued in Deschutes County Circuit Court for alledgedly making fraudulent claims about the company to investors.
Three separate suits have been filed this month, all seeking damages for alleged securities fraud. In addition, the state Division of Finance and Corporate Securities said it has opened an investigation into Van Vleck.
Van Vleck resigned from The Trunk Club on Dec. 9, according to one suit.
Two messages left for Van Vleck were not returned. Her attorney, Denver-based Tarek Saad, told The Bulletin it’s too early to comment on the cases and that they are still under review.
Van Vleck’s company, which she founded in late 2008, used webcams to connect men with Trunk Club “experts” who were based around the country. The experts would ascertain what the clients’ clothing likes and needs were and then purchase clothes for them and ship them to the client. The client paid for what he liked and returned what he didn’t free-of-cost.
The Trunk Club is now based in Chicago. Company CEO Brian Spaly said in a statement e-mailed to The Bulletin that the company is “privileged to be moving forward with new, experienced leadership and a capital investment that will strengthen the company. We believe that the market for personalized apparel shopping is large and unmet, and that Trunk Club will revolutionize and lead this rapidly growing segment.”
The suits were filed by Timothy Lynch, a private investor; Anthos Capital, a San Mateo, Calif.-based private equity fund; and The Trunk Club Inc., the successor company to the limited liability company.
In its suit, Anthos Capital says Van Vleck committed securities fraud by misrepresenting the company’s existing ownership when she was soliciting investment capital and also misstated the company’s financial health. Anthos’ suit says Van Vleck inflated revenues by treating business loans as income and not liabilities, and also failed to disclose total liabilities of more than $220,000.
Anthos invested $750,000 in The Trunk Club Inc., in November 2009. The firm now alleges its investment is worthless, and is seeking damages for the same amount.
Messages left at Anthos’ office were not returned.
Bend-based attorney Ed Merrill, who filed all three suits on behalf of the plaintiffs, said he cannot comment on the suits.
The suit brought by The Trunk Club Inc., the successor company, also alleges Van Vleck committed fraud and breach of fiduciary duty and asks the court to order Van Vleck to cease professing any affiliation with the company and to turn over ownership of the company’s Internet domain names.
Lynch’s suit says he is out $50,000 after investing in the company, believing his stock purchase would have made him a 10 percent owner in the company. The suit alleges that because Van Vleck did not disclose all of the company’s liabilities and inflated its financial health, the company needs to be recapitalized, essentially making his shares worthless.