Perry Ellis has won a lawsuit in its breach of contract suit against United Legwear over the Pro Player brand.
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A jury in Miami-Dade County in Florida awarded $8.3 million to Perry Ellis International and PEI Licensing LLC following a 10-day trial.
Perry Ellis , which was represented by Albert Lichy and Ezra Greenberg of the Florida-based law firm of Stearns Weaver Miller, sued United Legwear and its wholly owned subsidiary ULP IP Holdings for breach of contract, breach of the implied covenant of good faith and fair dealing and alter ego liability.
The trial centered around the fair market value of the Pro Player brand that Perry Ellis sold to a subsidiary of United Legwear in 2020 for an amount that was undisclosed at the time. Perry Ellis subsequently sued United Legwear after an appraisal to determine the brand’s final sale price was disputed.
United Legwear argued that it had no liability because the brand was worth less than the $5 million it had paid at closing in December 2020. The jury, however, concluded that the brand was worth $13.3 million as of Dec. 31, 2021, and Perry Ellis was entitled to $8.3 million in damages.
The jury also found that one of the defendants had intentionally managed the Pro Player brand to depress its value to avoid having to pay Perry Ellis fair market value for the brand.
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According to court papers, Perry Ellis and United Legwear had talked about a Pro Player sale as far back as 2015 when the sale price would have been $10 million. In lieu of purchasing the brand outright, ULC signed a license with Perry Ellis and “bargained for the right to purchase the Pro Player brand at the end of the licensing term on Dec. 31, 2020,” the papers read. Later, the two companies agreed to modify the price to $5 million, plus the difference between that figure and the fair market value of the brand on Dec. 31, 2021.
During the discovery period for the trial, Perry Ellis found that ULC planned “to stunt the sales growth of Pro Player” to get out of paying a full price for the business and then intended to “build Pro Player to a $100 million brand,” according to an email from United Legwear’s chief executive officer and sole owner that was presented at trial.
Repeated attempts to reach United Legwear’s attorneys as well as the company were not returned.
Melissa Bernheim, Perry Ellis’s chief legal officer said: “Albert, Ezra and the entire Stearns Weaver team did an extraordinary job for the company. Their mastery of the facts, their trial skills and the technology they brought to the courtroom allowed the jury to understand a very complex case involving highly technical information about valuing apparel brands.”
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