PROVIDENCE – Giovanni Feroce, CEO of Benrus LLC, has filed a civil lawsuit against the former owner of the company, alleging contract interference, fraud and negligent misrepresentation.
Benrus and GF Asset Management LLC are listed as plaintiffs, while defendants are Bernie Mermelstein and his companies, B-Man 1 LLC and M.Z. Berger & Co. The 38-page lawsuit was filed in the Court of Chancery in Delaware on Dec. 28.
Breach of contract also was alleged against B-Man and Mermelstein. Feroce is seeking damages resulting from the defendants’ alleged breach of the transaction agreements.
“This is a case about the attempted revitalization of a historic American watch brand – BENRUS – that was thwarted by the defendants’ misrepresentations and failure to perform their contractual duties,” the lawsuit reads.
Feroce’s GF Asset Management launched the military-inspired lifestyle brand, Benrus, which dates to the 1920s, in June 2014, taking it over from from New York City-based M.Z. Berger.
Feroce, reached Friday, said he has been advised not to comment. Mermelstein could not be reached for comment.
In the lawsuit, Feroce states that buzz surrounding the revival of the company – it had gone into bankruptcy in 1977 – resulted in a surge in orders, particularly for back-to-school products. But, the suit states, Feroce was kept “in the dark” about the increased orders, and the defendants delayed signing agreements involving his purchase of the company for another 10 months, to keep profits from the orders.
Feroce took over the company in April 2015. The suit states that the defendants “deliberately concealed” that Feroce’s marketing efforts doubled back-to-school sales, resulting in more than $1 million in additional sales. It also stated that the defendants misrepresented that a salesman could deliver between $4 million and $5 million in sales, and that the salesman never transitioned to the company as required by the transaction agreements.
The suit said the defendants continued to keep profits, and take and fulfill orders past Sept. 1, 2015, the date that Feroce’s Benrus was set to take over sales from MZB, and be entitled to revenue. It said the defendants were also responsible for defective merchandise, such as watches and bags, to customers and retailers, something that continues to “inflict irreparable harm on the Benrus brand.”
