Former CEO Suing Longaberger Co.

Tami Longaberger, who resigned as CEO of the Longaberger Co. in May, is suing the company over $1 million she loaned to the company in 2014. Longaberger alleges in the lawsuit that Longaberger Co.'s parent company, CVSL, asked her "to loan as much money as she could so that the companies could meet their immediate financial obligations." But CVSL has not repaid any principal or interest, according to the lawsuit.

CVSL denied the allegations.

In 2013, after years of declining sales, CVSL bought a majority stake in Longaberger Co., but relations between the companies quickly soured. In Tami Longaberger's resignation letter, she explained her decision to leave the company by citing several actions taken by CVSL, including reducing her salary during a four-month "deferral period" that was never made up, and caused Longaberger Co. to fail to pay sales and use taxes to several states, "prompting these state taxing authorities to seek to assess me personally."

CVSL responded by saying it had terminated Longaberger "after an internal investigation revealed that (she) engaged in substantial misconduct that has damaged the Longaberger Co. and CVSL."

Longaberger said CVSL's charges of misconduct were "a transparent attempt to evade their responsibilities under my contract."

 

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