Lululemon sued for fraud in Yoga pants fiasco
Vancouver, B.C. -- A lawsuit has been filed against Lululemon Athletica, accusing it of defrauding shareholders by hiding defects in yoga pants whose sheerness led to a costly product recall, and concealing talks that led to the sudden departure of its chief executive, Christine Day.
The lawsuit was filed by shareholder Houssam Alkhoury in Manhattan District Court. It names Day and company founder/chairman Dennis Chip Wilson and seeks class-action status for shareholders between March 21, when full-year results were announced, and June 10. Alkhoury is represented by Robbins Geller Rudman & Dowd, a specialist in shareholder class-action litigation.
It is separate from a May lawsuit filed in Delaware Chancery Court that accused Lululemon directors of boosting possible executive bonuses just before the recall.