IDAHO FALLS (AP) — The buyout of Beauty for All Seasons by a California company has ended up in U.S. District Court with charges of fraud and racketeering.
In a case filed last week, the former owners of the eastern Idaho company sued Jeunique International Inc., contending it misrepresented its financial condition when it bought Beauty for All Seasons last year in a stock-for-stock merger transaction.
Beauty for All Seasons, incorporated in 1977, established a worldwide network of color consultants who use a numbers-based computer program to advise customers on what colors, clothes, makeup and accessories look best on them.
Jeunique, based in Southern California, sells clothing, accessories, household products and nutritional supplements. It has warehouses and offices in China, Mexico, the United States, Canada, Scandinavia and Germany.
Beauty for All Seasons chief executive officer John Galazin announced the merger in March 2000, saying it would help both companies build stronger distribution systems. By July, the company had moved its operations to Southern California, and Galazin became a vice president of Jeunique and president of its subsidiary, Beauty for All Seasons International.
Now Galazin and his wife, Norma Virgin Galazin, and his in-laws, Allen and Verla Ball and Debra Adams, are suing Jeunique and its principals, Mulford J. Nobbs and Kenneth R. Finn. The lawsuit alleges that Jeunique misrepresented its financial position before the merger, and that Finn and Nobbs lied when they said they were getting financing that would allow for an independent public offering of stock.
The suit further says that Jeunique failed to pay Galazin commissions on time and denied him the authority that would have allowed him to generate growth for the company.
As a result of the merger, Beauty for All Seasons has lost consultants and its reputation in the business community, the complaint says. It adds that Jeunique has failed to pay bonuses to consultants, maintain inventory or even answer phones.