LOS ANGELES – Kim, Kourtney and Khloe Kardashian are being sued for millions by a former investor.
In a suit filed Monday, Hillair Capital Management claims they put up $10 million to help the Kardashian Beauty line, however the company states the famous sisters did not promote the brand on social media as promised — an accusation a lawyer for the reality starlets called a “disgrace.”
Greg Fayer, a lawyer for Hillair, told FOX411 the company is disappointed with the Kardashians.
“We are disappointed it has come to this,” he said. “Hillair was looking forward to a long and mutually beneficial relationship with the Kardashian sisters. Unfortunately in the end we were left with no other option than to file suit.”
Hillair claims it put up millions for the distribution of the line after the sisters’ former partner, Boldface, went belly up with financial issues. Court documents obtained by Radar Online claim Hillair held up their end of the bargain while the Kardashians allegedly stopped promoting the beauty line and searched for new investors to replace Hillair.
“…The Kardashians almost immediately stopped marketing, promoting and supporting the line and began courting new potential investors to buy out Hillair's stake. In short: the Kardashians wanted a better, more lucrative deal than they had struck with Hillair…” the suit claims.
According to court documents, the Kardashians are being sued for breach of contract, breach of covenant of good faith and fair dealing, breach of fiduciary duty and fraud/deceit.
However, Michael Kump, a lawyer for the E! reality stars, insists the lawsuit is filled with lies.
"This complaint is an obvious attempt to create leverage by hedge fund operators who took over the Kardashians’ cosmetics brand,” he told FOX411. “The Kardashians have suffered enormous damages as a result of the many failures and breaches created by the operator’s mismanagement of the company. The lawsuit is a disgrace. It is a jumble of false accusations which will be exposed as lies.”
Fayer said Hillair is searching for their $10 million back and the profit they could have made if the business deal had worked out. That number could hovers near up to $200 million.
“Hillair’s damages include over $10 million in funds actually invested in the Kardashian Beauty line, as well as the value of Hillair’s equity stake in the venture,” Fayer said. “Hillair’s equity stake is currently valued at between $64 million and $180 million, depending on the method of calculation…”
Ultimately, Fayer hoping to take the company’s dispute with the Kardashians to court.
“As for the result, we look forward to presenting our case to the jury and it will be up to the jury and the court to decide the proper outcome.”