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Business disputes getting ugly for Tory Burch and ex-husband

The Tory Burch fashion line can be found in high-end stores across the country and abroad, including Tysons Galleria in McLean. Tory Burch launched her luxury label back in 2004 in partnership with her then-husband Chris Burch., and it has now become a million dollar closely-held business with rumors of a possible billion-dollar IPO.

However, since her divorce from Chris Burch in 2006, Tory Burch's success has not always been simple. In battling those who would like to take unfair advantage of her success, she has been in competition with her ex-husband, which has led to several instances of business litigation between the two.

In 2011, Chris Burch opened his own line of retail stores call C. Wonder. However, Tory Burch has become concerned because C. Wonder sells items very similar to the Tory Burch signature line but at much lower prices.

Currently, each of the Burches owns 28.3 percent of the company Tory Burch LLC. Another 20 percent is held by a Mexican private equity firm. Chris Burch has remained as a co-chair of Tory Burch LLC despite their differences, until he was asked to step down in March of this year.

Recently, both sides have been involved in several business litigations against each other. In October, Chris Burch filed a breach of contract and tortious interference complaint against Tory Burch LLC for unfair competition, as well as a breach of fiduciary duty claim for improper interference and acting in bad faith with his attempts to sell some of his ownership of Tory Burch LLC.

Tory Burch LLC filed a countersuit against Chris Burch, claiming that C. Wonder is infringing on the Burch private label by producing knock-offs, using unfair competition for his personal benefit, and breach of his fiduciary duty by using confidential information belonging to Tory Burch LLC including trade secrets, a claim that Tory Burch has won in the past against other entities.

Source: Forbes, "Why Tory Burch Should Be Fashion's Next Billionaire (And How Her Ex Could Stop Her)," Clare O'Connor, Nov. 26, 2012

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