YouTuber Catherine McBroom of the "The ACE Family" attempted a "coup" of a company she launched with another business, according to allegations made in a civil complaint obtained by Insider.
The complaint, which demands a jury trial and compensation for damages, accuses McBroom of eight charges, including breach of contract and cybersquatting, in the Superior Court of California (Los Angeles).
McBroom, 30, runs the vlog-style YouTube channel "The ACE Family," which has over 19 million subscribers, with her husband, the ex-professional basketball player Austin McBroom. The lawsuit was filed on April 12 by TBL Cosmetics, Inc. (TBL), a cosmetics company based in Delaware that "specializes in creating, building, and scaling cosmetics brands," according to the legal complaint.
The complaint alleges that on August 7, 2020, Catherine McBroom signed a contract with TBL to create 1212 Gateway, a "premium skin care line" with "ethically sourced" ingredients. The report claims the contract gave TBL the responsibility to perform day-to-day management, including running the online sales portals and accounts, while Catherine would be the "public face" who was "responsible for marketing the brand to her followers."
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Under a section of the initial complaint titled "Catherine McBroom's Attempted Coup," TBL alleges that soon after 1212 Gateway began to grow and exceed its financial expectations, Catherine "conspired with her family, friends, and other under-utilized members or idle of her entourage to stage a takeover of 1212 Gateway's management."
Catherine, whose attorney did not immediately return a request for comment, denied "each and every allegation" in the complaint in a July 9 court filing reviewed by Insider.
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Specifically, Catherine's attorney denied that TBL "sustained any injury, damage or harm" as a result of Catherine's actions and that TBL gave her consent for "all acts and occurrences alleged" in the complaint, which TBL denied in a subsequent response.
The existence of the complaint was first reported on by the drama account DefNoodles in an Instagram post on Friday.
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The lawsuit accuses Catherine McBroom of changing account login information amid an alleged 'hostile takeover'
The complaint says that on or around March 10, Catherine gained access to and changed the passwords of 1212 Gateway's primary email account, website, GoDaddy account, Shopify account, Instagram profile, and other social media accounts.
TBL had the "exclusive right and responsibility" to control these accounts because they were "among the 'tools and systems necessary to sell' Company products," the complaint says.According to the document, Catherine allegedly made "repeated assurances" that she would return the accounts to TBL, but never did.
The plaintiff claims that Catherine caused the company immediate damage when she allegedly took over the accounts. "After taking sole control over the Website, Ms. McBroom caused it to crash for two straight weeks," the complaint alleges.
The complaint also claims that 1212 Gateway experienced "volumes of negative customer feedback" since Catherine's alleged "hostile takeover."
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The document also alleges that on April 7, Catherine threatened to unilaterally dissolve 1212 Gateway and "appoint herself to oversee the winding up of the Company's affairs and prohibit any person from engaging in any activity related to the business unless authorized by her," which TBL said "has no basis" in their agreement.
Catherine threatened to dissolve the company, the lawsuit claims
The complaint states that Catherine had specific demands for TBL, which they would need to follow within "a day and a half's time" or else the company would be dissolved.
The document alleges that she said via counsel that TBL must transfer the website to her, give her all the company's books and records, and replace the current CEO with a new one within five business days, among other demands.
Court records show that on April 12, TBL filed a request for a temporary restraining order against Catherine to prevent her from directing the dissolution of 1212 Gateway and inflicting "immediately and irreparable injury" to TBL.
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On April 13, Catherine's attorneys filed an opposition document arguing that the application for a temporary restraining order was "moot" because 1212 Gateway had "already been dissolved" per McBroom's written consent within the required five days' notice.
In response, TBL filed a "notice in further support" of the restraining order. It was unclear whether TBL's request for a restraining order was accepted.
TBL's attorney did not immediately respond to a request for comment.
