Designer Rhuigi Villaseñor is being sued by a Rhude minority stake holder who alleges Villaseñor stole profits from the streetwear brand to support his “lavish lifestyle.”
According to court documents filed Monday at the U.S. District Court in the Central District of California, Villaseñor is being sued by George Robertson, a former collaborator of the designer who holds a 20 percent stake in Rhude, the streetwear company he launched in 2015.
Robertson is alleging that Villaseñor has been “pilfering the Rhude Companies’ coffers to support [his] lavish lifestyle” and that he’s “diverted Rhude sale proceeds from the Rhude Companies into his personal limited liability company.”
A comment obtained through Villaseñor’s publicist read: “Mr. Robertson’s assertions are completely unfounded and his legal claims have no merit at all. Mr. Villaseñor and RMV Group will vigorously defend against this lawsuit and look forward to presenting their defenses in court.”
The lawsuit also alleges Villaseñor has been infringing on the Rhude trademark, naming the designer’s two-part “Rhu” collaboration with Zara as an example. Documents state that the “Rhu” branding was originally developed by and for Rhude.
Court documents also allege that Villaseñor was publicly dishonest about Rhude’s revenues, stating the designer proclaimed Rhude’s 2020 revenue was $30 million and 2021 revenue was over $30 million, however Rhude’s tax returns showed “revenue of $10 million in 2020 and $18 million in 2021.”
Villaseñor is also being accused of selling Rhude’s goods to “VIP clients,” such as NBA players, celebrities and musicians “in private sales that directly benefit [his holding company RMV] or Villaseñor himself.”
The lawsuit provided an example of a sale that took place on Sept. 28, 2020, where Villaseñor allegedly sold $15,331.50 worth of Rhude products through a VIP sale and pocketed the funds.
Robertson is also alleging Villaseñor has tried to oust him from the company, with court documents stating Robertson was told “he should not come to the Rhude offices anymore” in mid-2020 and that Villaseñor eliminated his access to company files in January 2021.
Robertson is seeking compensatory damages, treble damages and punitive damages, as well as the removal of Villaseñor from his managerial position at Rhude.
The lawsuit comes shortly after Villaseñor stepped down from his position as creative director of Bally last month. The designer held the position for roughly a year and a half.