SOURCE: Heller Ehrman, LLP

November 06, 2007 14:46 ET

Court Case to Proceed Against Judy Dlugacz -- Former Olivia Executives Seek Equitable Repurchase of Shares Plus Millions in Damages

SAN FRANCISCO, CA--(Marketwire - November 6, 2007) - Amy Errett, former CEO of The Olivia Companies, announced today that she and three other former officers of the company filed an amended complaint on October 29, 2007 in their ongoing lawsuit against Olivia and its founder, Judy Dlugacz. The amended complaint was filed after a ruling by the San Francisco Superior Court denying most of Ms. Dlugacz's motion to dismiss, and permitting four of the five claims alleged against her to proceed.

The former officers allege that they successfully executed the business plan to which Ms. Dlugacz had agreed, growing Olivia from a modestly successful niche company into the world's leading provider of travel and lifestyle services to the lesbian community. Ms. Errett and her colleagues allege that, during the five years they ran the company, its revenues grew nearly 400% from $6.8 million to an expected $25 million in 2007. They allege that Ms. Dlugacz terminated their employment without notice or cause when she became concerned that the public had come to view them, rather than Ms. Dlugacz, as responsible for Olivia's strong growth and diversification.

Although potential private investors valued the Company at $30 million or more, Ms. Dlugacz has taken the position that the former executives' 30% ownership interest is worthless, and has refused to repurchase their shares or to make their contractual severance payments. They also allege that Ms. Dlugacz made false and defamatory public comments about their management of Olivia, that she has mismanaged the Company since they were fired, that she is misusing its assets for the personal benefit of herself and her family, and that she is taking advantage of Olivia customers by charging inappropriately high prices.

The former executives seek an order compelling Ms. Dlugacz to repurchase their 30% interest in the Company, pay them their contractual severance payments, and pay additional damages in excess of $20 million. Ms. Errett said that she and her colleagues intend to ask the court for a jury trial at the earliest possible date.

Contact Information

  • Contact:
    Michael Rugen
    Heller Ehrman, LLP
    415.772.6396