A Glossy Tale Gone Wrong: How a Fashion Partnership Turned into a Legal Battle

Nothing collapses a carefully curated high-fashion, jet-setting image faster than a lawsuit that reads like a 1970s Sidney Sheldon potboiler turned into a made-for-TV movie starring D-listers.

The Vanity Fair version of this narrative is irresistible: private jets, luxurious homes in exclusive enclaves, front-row seats at elite fashion shows, appearances at the Met Gala, and a charming story about two business partners who fell in love, shared a life, and a desk. Of course, this story was impeccably illustrated by glossy magazine spreads and high-end imagery fit for the Robb Report.

Luxury fashion partners signing contract with legal counsel.

But beneath the glamorous facade lay a ticking time bomb of unaddressed legal and financial realities—realities now exploding in public view.

The Players: A Powerful Couple in Fashion and Venture Capital

Natalie Massenet is renowned for building the luxury e-commerce site Net-a-Porter and later founding the venture capital firm Imaginary Ventures with Nick Brown. Erik Torstensson co-founded the agency Saturday Group and the prominent denim label Frame and also holds a significant investment in the global consumer brand Skims.

Together, Massenet and Torstensson were not only romantic partners but frequent professional collaborators whose lives and business interests intricately overlapped.

Yet now, this powerful couple finds itself in a bitter legal battle unfolding across two coasts.

The Legal Core: Lack of Documentation and Financial Clarity

At the heart of this expensive, public conflict is the stark absence of clear, detailed documentation outlining their intertwined personal and business lives. This oversight is the foundation of the unfolding drama:

  • Massenet's California complaint alleges Torstensson extracted roughly $95 million from her—through money, introductions, and crucial business access—on the basis of promises of repayment and a shared financial upside that never materialized.
  • In response, Torstensson's New York filing counters with numerous defenses, a custody claim for their child, and troubling allegations of personal failings and addictions on Massenet’s part.
  • Perhaps most alarming from a business perspective is Massenet’s claim of being left "cash-strapped with her child" after funding an extravagant lifestyle based on unfulfilled financial promises from Torstensson. To investors and shareholders, “cash-strapped” is as reassuring as trying to feed grizzlies by hand in Yellowstone National Park.

Collateral Damage: Immediate and Long-term Business Consequences

The public nature of these filings has already begun inflicting substantial collateral damage:

  • The reputation and value of Imaginary Ventures, a fund with numerous outside Limited Partners (LPs), are now jeopardized.
  • Frame, the popular denim brand co-founded by Torstensson, risks diminished valuation and investor confidence.
  • Skims, the global consumer brand associated with both individuals, faces potential reputational harm by association.

As soon as these allegations became public, stakeholders, partners, and boards were forced to issue cautious statements and distance themselves, even as company values and future deals have already suffered significant hits.

Avoiding Legal and Financial Oversights in Business Partnerships

It’s astonishing—and yet true—that two seasoned and successful business operators allowed their substantial financial and operational arrangements to remain undocumented and unclear. Key areas overlooked include:

  • Equity stakes: No formal clarity or explicit agreements.
  • Finder fees and commissions: Implied promises with no codification. particularly as leadership transitions approach.
  • Sweat equity and vesting schedules: Entirely undefined.
  • Expenses: No documentation about reimbursement responsibilities or tracking of business expenses versus personal spending.

This oversight was not a mere failure of foresight; it was a blatant disregard for foundational business practices.

Key Legal Lessons for Founders and Business Partners

Businesses and partnerships must meticulously document their arrangements and clearly define all financial obligations, rights, and expectations, especially in scenarios where personal and professional relationships overlap:

  • Ensure clear documentation of financial contributions, repayments, and equity distributions.
  • Formalize any promised fees, commissions, or equity stakes to avoid disputes and litigation.
  • Clearly define expense management, specifying reimbursement policies and tracking mechanisms.
  • Incorporate confidentiality and non-disparagement clauses to safeguard reputations and business interests.
  • Use mediation and arbitration clauses proactively to manage conflicts privately and prevent public fallout.

Investor and Shareholder Legal Considerations

For the investors and shareholders of Imaginary Ventures, Frame, and Skims, the impact is already tangible and severe. Company values are taking immediate hits, and future deals will be scrutinized and potentially jeopardized. Shareholders facing these financial damages, especially minorities, may seek legal remedies themselves, potentially leading to further lawsuits or boardroom shakeups.

Moreover, shareholders are likely assessing their oversight mechanisms—questioning how this level of operational and financial entanglement occurred without due diligence and proper governance structures. The implications extend beyond financial losses, potentially reshaping board composition, management oversight, and investor relationships across these entities.

Final Thoughts: Legal Clarity Protects Business Stability

This public disaster underscores a fundamental truth: clear, meticulous, and proactive legal planning is essential for protecting business partnerships and preventing catastrophic outcomes. Had Massenet and Torstensson adequately addressed these legal necessities from the outset, their professional and personal relationships—and the entities dependent upon them—would likely have remained stable and protected.

Instead, the absence of proper documentation and legal oversight now ensures we'll all be watching this drama unfold publicly over the next year, at least—while the involved companies suffer unnecessary and potentially irreversible damage.

Frequently Asked Questions (FAQs)

  • Core documents include a partnership or operating agreement, contribution and equity schedules, IP ownership assignments, expense/reimbursement policies, and confidentiality/non-disparagement provisions. Clear dispute-resolution, buy-sell, and exit clauses are critical.
  • Use formal capitalization, separate bank accounts and cards, written reimbursement policies, and approval workflows. Maintain contemporaneous records to avoid commingling and to preserve the corporate veil.
  • Arbitration, mediation before litigation, confidentiality, and non-disparagement clauses. Pair these with protective order language and forum selection to manage venue and publicity risks.
  • Unwritten promises are hard to enforce and invite claims of fraud, unjust enrichment, or fiduciary breach. Memorialize terms in signed agreements with consideration, timelines, and measurable obligations.
  • Adopt conflict-of-interest policies, require related-party disclosures, and document approvals. Establish independent committees, enhance reporting, and use key-person insurance and contingency plans to protect operations and LP/shareholder interests.

Protect Your Business and Partnerships with Legal Clarity

The line between personal trust and professional responsibility can blur easily—especially when relationships and investments overlap. Safeguard your business by establishing precise legal agreements and governance structures before issues arise. Consult an experienced business attorney to draft, review, and enforce partnership, protect your assets, and prevent disputes from escalating into costly public battles. Contact us today.