For nearly five years, LifeThreads was unable to turn a profit selling medical scrubs, according to a lawsuit, but in the midst of the Covid-19 crisis it turned a corner by selling N95 masks and other personal protection equipment.
But as profits poured in, the executive who prompted the new strategy, Jatinder Dhall of Katonah, was allegedly cut out of his share of success.
Dhall, who also goes by Ricky Singh, sued LifeThreads LLC and its owners, Aditya Kadia and Karan Jhunjhunwala for $2 million on July 28 in Westchester Supreme Court.
They only wanted to use his “vast knowledge, resources and contacts,” the complaint states, “to turn LifeThreads from a plummeting business into a successful business.”
LifeThreads did not respond to an email message asking for its side of the story.
Dhall is CEO of Seena International Inc., a men”™s and boys”™ apparel wholesaler based in Hauppauge, Suffolk County.
He claims more than 30 years of experience in financing apparel manufacturing, importing the merchandise and marketing and selling the goods.
LifeThreads was founded in 2015. The midtown Manhattan company”™s motto is “Fashion meets function.”
“We want runway-worthy trends to inspire our designs,” its website states. “We believe in working hard and dressing well.”
Late last year, when LifeThreads was “on the verge of going out of business,” Dhall claims, he was asked to run day-to-day operations. He took over as chief executive officer on March 1.
Dhall was to receive a 10% equity interest in the company, according to the complaint, and 15% of net profits.
In mid-March, he recommended selling N95 masks and other personal protection equipment, according to the lawsuit.
LifeThreads had less than $50,000 in the bank and was unable to buy the products, the complaint states, so Dhall loaned the company $980,000. In return, he was to get 45% of net profits from PPE sales and repayment of the loan.
From March 1 to May 31, the company purportedly sold more than 3 million scrubs, masks and other PPE items, and it booked more than $6 million in sales.
LifeThreads was more profitable in the past four months through July, Dhall claims, than in the 4½ years after the company was founded.
Yet, on June 1, LifeThreads”™ owners allegedly terminated the CEO and PPE contracts and have refused to pay Dhall his share of profits.
They never had any intention of abiding by the deals, Dhall alleges, and he accuses them of fraud, unjust enrichment, misrepresentation and breaches of contract.
He is asking the court to declare that he owns 10% of the company and to award him at least $2 million in damages.
Dhall is represented by Westport, Connecticut attorney Justin H. Scheier.
