Saturday, January 1, 2022

The New Orleans academics and the $124 toothpaste

Honestly, the most interesting business news I've seen during this liminal time between Christmas and New Year's is this story from my local New Orleans paper.  Four academics - from Tulane, LSU, and the University of New Orleans - joined together to form a ... well, a gourmet toothpaste company.  Which apparently became quite popular, recommended by Gwyneth Paltrow and sold in Harrod's and luxury stores in Dubai. Three of the four founders are now suing the CEO for fraud and misuse of company funds:

the lawsuit says worrying signs were accumulating, including Sadeghpour's persistent refusal to move operations from his parents' home on 8th Street in Metairie, a few blocks from the Lakeway business complex, to offices rented in the BioInnovation Center on Canal Street.

When the board members would meet at Sadeghpour's house on Wednesdays, they started to get uneasy about the fact the company's sales stagnated after 2018 at the $1 million mark....The lawsuit says the other board members noticed an accumulation in Sadeghpour's home of Japanese pottery and other high-end art.

The lesson, apparently, is that if you're the CEO of a small business and you're spending company funds on personal luxuries, it's probably best not to hold board meetings at your home.  But, according to one the plaintiffs, "We wanted him to move this business out of his kitchen but he refused... It seems he wanted to have the convenience of walking down his stairs in his robe at his leisure and have his assistant go to the Whole Foods and get him breakfast every morning."

Happy New Year, everyone!

https://lawprofessors.typepad.com/business_law/2022/01/the-new-orleans-academics-and-the-124-toothpaste.html

Ann Lipton | Permalink

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