A judge said Tuesday he’s inclined to let an arbitrator decide whether a hedge fund’s lawsuit alleging three Kardashian sisters committed fraud and breach of contract regarding the funding of a line of beauty products should be decided by an arbitrator or the court.
However, Los Angeles Superior Court Judge Richard Fruin said he is taking the case under submission, possibly for more than a week. He also said he is putting the lawsuit on hold until he decides whether to uphold his tentative ruling.
Hillair Capital Management filed the lawsuit March 21. The fund alleges it put up millions of dollars in July 2014 to help Kim, Khloe and Kourtney Kardashian keep the beauty line afloat after former distributor Boldface encountered legal and financial troubles.
Hillair’s suit states the fund agreed to pay for the ongoing distribution costs of the line and that the Kardashians said they would continue to be the face of the line and actively promote it.
“They convinced the plaintiffs to put up millions of dollars to fund their line,” plaintiffs’ attorney Gregory Fayer said.
Fayer said the sisters had a duty to market and support the line.
Outside the courtroom, Fayer said he was pleased the judge took the case under submission. He said he was hopeful Fruin would take another look at the court papers and come to a conclusion different from his tentative ruling.
Lawyers for the Kardashians maintained all of Hillair’s allegations are subject to arbitration based on written contracts between the parties. One of the sisters’ attorneys, Jonathan Steinsapir, said Hillair has failed to abide by the parties’ agreements, not the Kardashians.