Moxie Apparel Takes Action Against Investor and Former Board Member

Moxie Scrubs, a medical apparel company, entered into a contractual agreement with a scrubs manufacturer to ensure sufficient inventory was available to fulfill incoming orders. However, things turned sour when the CEO of the manufacturer—who was an investor and former board member of Moxie—exploited his position of power to cut off Moxie’s access to inventory and outside funding, ultimately putting the business at risk. 

Nick Wasdin represents Moxie Apparel in a lawsuit against Moxie’s former director, alleging that the Defendant breached his fiduciary duties and tortiously interfered with Moxie’s business. According to the complaint, filed in the United States District Court for the District of Massachusetts, the Defendant agreed to design and manufacture 100% of Moxie’s inventory requirements, in exchange for, among other things, a seat on Moxie’s board of directors and favorable investment terms.  

Just a few months into the agreement, the Defendant became an officer of, and one of the largest individual shareholders in, Moxie’s largest competitor. The complaint alleges that this created a significant conflict of interest, as the Defendant was simultaneously a board member of Moxie and an owner of Moxie’s largest competitor.  

“From the outset, Moxie dealt with the Defendant in good faith, expecting the Defendant to fulfill his obligations to Moxie, including as a director,” said Wasdin. “When Moxie lost access to inventory and outside funding, it jeopardized Moxie’s ability to meet customer demand, which hurt Moxie’s balance sheet and left the business in a challenging position. Moxie has every right to seek compensation for these actions and attempt to protect the years of hard work and dedication it took to build an exciting new medical apparel company with a significant following.” 

The lawsuit aims to hold the Defendant accountable for breach of fiduciary duty, tortious interference, and unfair competition.