Amazon's Fight Against Counterfit Beauty Products, Thirteen Lune's Lawsuit and More Headlines

Summary

Gloss Angeles Podcast Episode Summary Episode Title: Amazon's Fight Against Counterfeit Beauty Products, Thirteen Lune's Lawsuit and More Headlines
Release Date: April 1, 2025
Hosts: Kirbie Johnson and Sara Tan

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1. Exciting News: Podcast Nomination for Best Beauty Advice

Kirbie Johnson and Sara Tan kick off the episode with thrilling news about their podcast being nominated in the People’s Reader’s Choice poll for the Best Beauty Advice category. This recognition places them alongside esteemed podcasts such as Fat Mascara by Arielle Laurie and Lipstick on the Rim by Molly Sims.

• Kirbie (01:20):
  “We're nominated in the Reader's choice category for best beauty advice. We're among some amazing podcasts.”

• Sara (01:43):
  “Please, please. We're very excited and I think that we're the seventh slide, if that matters.”

The hosts express their surprise and gratitude, urging their listeners to vote and support them in this competitive category.

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2. Ultraviolet Launches at Sephora

The discussion seamlessly transitions to exciting beauty news: Ultraviolet—a beloved sunscreen brand—has officially launched at Sephora in the United States. Kirbie clarifies the correct pronunciation and spelling, ensuring accurate information for their audience.

• Kirbie (02:11):
  “Ultraviolet is now at Sephora.”

They delve into the specifics of the US formulations, highlighting the difference in ingredients designed to be less irritating for American consumers. Both hosts share their personal experiences with the products, emphasizing their effectiveness and the variety available.

• Sara (04:00):
  “I used Vibrant Screen on myself, the kids, Matt, the entire family on vacation, and no one complained about it being irritating at all whatsoever.”

Kirbie discusses the different versions available, such as Future Screen and Supreme Screen, noting minor inconveniences like the dispensing mechanism but commending the overall quality.

• Kirbie (04:55):
  “The formulations feel and look identical... There’s only one sunscreen I’ve ever had that happened with me, and it was La Roche Posay.”

The segment concludes with enthusiasm about the availability of Ultraviolet products at Sephora, encouraging listeners to explore the new offerings.

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3. Amazon’s Commitment to Combating Counterfeit Beauty Products

In a sponsored segment, Kirbie and Sara delve into Amazon’s ongoing battle against counterfeit beauty products. They discuss Amazon's Brand Protection Report and the company's efforts to eliminate counterfeit goods from its platform.

• Kirbie (10:30):
  “They aggressively pursue anyone who violates its zero tolerance policy for counterfeit products and they make sure that they are held accountable.”

Sara highlights Amazon's transparency program, which verifies the authenticity of products before shipment, ensuring customers receive genuine items.

• Sara (11:10):
  “Amazon uses advanced technology to verify products is genuine, simplifying brand protection for selling partners and safeguarding customers.”

Kirbie emphasizes the importance of purchasing from official brand storefronts on Amazon to avoid counterfeit products, offering practical tips for consumers:

• Kirbie (12:38):
  “Double check that you're buying from the actual brand storefront... look on the brand website to see if they list Amazon as a partner.”

Sara adds that customer reviews and Amazon's return policies are reliable indicators of product legitimacy.

• Sara (14:00):
  “If it has like one review, like you're like, I feel like this product has been out for a while. So it should have more reviews.”

The hosts commend Amazon’s proactive measures and encourage listeners to utilize these features to protect themselves from counterfeit products.

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4. In-Depth Analysis: Thirteen Lune's Legal Troubles

A significant portion of the episode is dedicated to the threatening lawsuit facing Thirteen Lune, a beauty retailer focused on supporting black and brown founders. Founder Nikao Grieco is accused by investors of securities fraud and misappropriating company funds for personal use, including expensive tickets and family vacations.

• Kirbie (17:25):
  “We had no idea. But you know what, they cover our stuff a lot, so.” (Note: Contextual reference to the nomination)

Kirbie provides a detailed account of the allegations, citing specific claims from the lawsuit filed on March 4th in Los Angeles. The investors allege that Grieco misrepresented the company's financial health and used funds for personal enrichment during a period of significant debt.

• Kirbie (18:40):
  “The plaintiffs in this case... are claiming that she, as CEO and the other named defendants, allegedly falsely represented and concealed material information regarding the financial condition of the company and its intent to repay the debt.”

An excerpt from the court filing is read to highlight the severity of the accusations:

• Court Filing Excerpt (Kirbie):
  “Nikao Grieco wasted no time focusing that goal on herself as she sought millions of dollars from investors while personally enriching herself and her family...”

Grieco’s response is covered, where she vehemently denies all allegations, asserting that the lawsuit is baseless and that she was not responsible for approving financial expenditures.

• Kirbie (23:02):
  “She says that the restructuring of the company was properly handled... She says that they were given the opportunity to vote just like every other vc that she included them in constant communication regarding the process...”

The hosts express their shock and emphasize the developing nature of the story, encouraging listeners to stay informed and support independent journalism.

• Kirbie (25:20):
  “It's a developing story. If you know anything or you have anything to share, my inbox is always open.”

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Conclusion

Kirbie and Sara navigate through a multifaceted episode, balancing exciting beauty news with critical industry issues. From celebrating their podcast nomination to dissecting Amazon's strategies against counterfeit products and unpacking the legal turmoil surrounding Thirteen Lune, the hosts provide their audience with insightful commentary and practical advice. Their engaging dialogue, punctuated with notable quotes and real-time reactions, ensures listeners are well-informed and entertained.

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Notable Quotes:

• “We're nominated in the Reader's choice category for best beauty advice. We're among some amazing podcasts.” – Kirbie Johnson (01:20)

• “Amazon uses advanced technology to verify products is genuine... safeguarding customers.” – Sara Tan (11:10)

• “Nikao Grieco wasted no time focusing that goal on herself as she sought millions of dollars from investors while personally enriching herself and her family...” – Kirbie Johnson (Reading court filing) (18:40)

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Stay Connected: For more updates and in-depth stories, subscribe to Kirby's newsletter Ahead of the Curb and follow Gloss Angeles on their social media platforms.

Transcript

[Capital One Bank Guy]

Banking with Capital One helps you keep more money in your wallet with no fees or minimums on checking accounts and no overdraft fees. Just ask the Capital One bank guy. It's pretty much all he talks about. In a good way. He'd also tell you that this podcast is his favorite podcast too. Ah, really? Thanks. Capital One Bank Guy. What's in your wallet? Term supply. See capital1.com bank capital1 NA member FDIC.

[Kirby Johnson]

G L A M Los Angeles.

[Sarah]

Hi, Kirby.

[Kirby Johnson]

Hi, Sarah. Welcome to Los Angeles.

[Sarah]

Congratulations, Kirby Johnson.

[Kirby Johnson]

On what?

[Sarah]

We're nominated.

[Kirby Johnson]

We are. We're nominated for People's Reader's Choice poll for the most beautiful issue. When we got this email, I was like, what? At first I was like, are we nominated as like most beautiful podcast hosts? And then, no, we're not. But close. We're nominated in the Reader's choice category for best beauty advice. We're among some amazing podcasts. Fat Mascara well by Arielle Laurie and Lipstick on the Rim by Molly Sims.

[Sarah]

Yeah. Really good company.

[Kirby Johnson]

Now we have to get Molly on our podcast and do a swap with her because we've done with Ariel and.

[Sarah]

Oh my God, you're right. Other girls. Yeah. But you guys, please vote for us. I don't know. When does it end? Do you know?

[Kirby Johnson]

April 15th. I believe you can vote as many times as you want. We've told the slack. I'm gonna send a mass email. I'm gonna put it in the group chat.

[Sarah]

Pretend it's like Dancing with the Stars.

[Kirby Johnson]

Yes.

[Sarah]

Where you're just constantly pressing the button.

[Kirby Johnson]

Please, please. We're very excited and I think that we're the seventh slide, if that matters.

[Sarah]

Thank you people.

[Kirby Johnson]

Thank you people.

[Sarah]

This was really a surprise. We did.

[Kirby Johnson]

We had no idea. But you know what, they cover our stuff a lot, so.

[Sarah]

They do. They're good people there.

[Kirby Johnson]

I feel we're very grateful. Yes. Okay. We have a lot of news to get through, so we're just going to dive right in. First and foremost, Ultraviolet is now at Sephora.

[Sarah]

Woo hoo. Not Ultra Violette. Ultra violet.

[Kirby Johnson]

Not Ultra Violet. Violette. I know that some of y'all were mad at me cause I used to say ultra Violette or Violet, I can't even remember at this point.

[Sarah]

Ultra.

[Kirby Johnson]

Again, violet was not.

[Sarah]

Honestly though, French pronunciation, I think it's Violette.

[Kirby Johnson]

But if you. So the way that this. I mean, yes, you're right. And the way this is written is that's not Violet, that's Violet.

[Sarah]

Yeah.

[Kirby Johnson]

E, T, T, E. We're just so. We weren't we weren't. And also, I'll just have. I have to tell you, the founders used my sound bite of saying ultra Violette in their promotion of the fact that they are now at Sephora. So it clearly is not that big of a deal.

[Sarah]

It's not that big of a deal. The biggest deal is that they're at Sephora. They're at Sephora. We can buy it in the United States.

[Kirby Johnson]

Hallelujah. So Sarah and I have had the products, the US Formulations, because I think that's the biggest thing that people have been asking about. How different are these formulations from the ones that you would pick up around the rest of the world? That's what made them so great. And they are different. They're made with ingredients that are okay to use here in the US So I can't personally speak to whether or not it is irritating to the skin or if it makes your eyes burn, because I've never had that problem in general. There's only one sunscreen I've ever had that happen with me, and it was La Roche Posay. And I remember going, oh, my God. I now know what people are talking about when their eyes start stinging from sunscreen. I was sweating profusely. It was getting my eyes. It was terrible. I have not sweat enough wearing this new formulation to be able to tell you that my eyes got irritated or that my skin got irritated. But I mean, the formulations feel and look identical.

[Sarah]

Totally.

[Kirby Johnson]

However, the benefit of having a sunscreen that's not made here in the US is that they get to use these more advanced sunscreen filters that are way less irritating.

[Sarah]

Yes.

[Kirby Johnson]

So, and then the other formulations, like the mineral sunscreen is the same formulation because it can be.

[Sarah]

Exactly. Yeah. I was just gonna say. So I used Vibrant Screen on myself, the kids, Matt, the entire family on vacation, and no one complained about it being irritating at all whatsoever. And it was wonderful.

[Kirby Johnson]

And that's the Face and body sunscreen.

[Sarah]

Exactly.

[Kirby Johnson]

Yeah. I really like that version. They have different names now for certain products. So there's the Future Screen. This is the Fluid Facial sunscreen. It's fragrance free, SPF 50. I'm wearing that today under my makeup. I think it is so beautiful. It says it's a modern mineral sunscreen. I think they have a version of originally, but it's not called Future Screen.

[Sarah]

It's called Fave Fluid.

[Kirby Johnson]

Right, okay. Yes. And it's in a different bottle.

[Sarah]

Yes.

[Kirby Johnson]

I didn't like it as Fave Fluid.

[Sarah]

Yeah, Yeah.

[Kirby Johnson]

I never gravitated towards it. This one I really gravitate towards. The only thing I'll say about future screen, though, is that because it is a fluid and it is runny, I do have issues with the nozzle dispensing product. When it's not in my hands, I will dispense it, put it on the sink, and then pick it back up and then there'll be sunscreen on the sink. So I do think they got to measure that out. It is a little messy, but I do love it. I think. I mean, I'm using Supreme Screen regularly. I actually really like the velvet screen Mattifying mineral, they call that, I think, Lean screen in the original form.

[Sarah]

Okay.

[Kirby Johnson]

So I didn't ask them during our zoom, when they were announcing this launch over here in the US why they changed the name, why they changed the names. I think that might be a little confusing for people if they have been hoarding it from.

[Sarah]

Did they change the international trips universally?

[Kirby Johnson]

I don't think so.

[Sarah]

So maybe that it's like an indicator of, like, you're getting the US Version, you know?

[Kirby Johnson]

Okay, yeah, totally.

[Sarah]

And maybe it also helps avoid, like, dupes. I don't know.

[Kirby Johnson]

Totally. So if you are interested in trying Ultraviolet, they have. There we go. See Ultraviolet. They have a mini SPF Mates duo, which is so cute. I love these. I love having them for travel. But it includes the Supreme Screen and then also the Velvet screen. So the mineral and the chemical and Supreme Screen is the one that everybody knows and loves. That's the one. They've kept the same name. So I don't know really why they changed lean to velvet or whatever, or why now Vibrant screen is the face and body.

[Sarah]

You'll find out.

[Kirby Johnson]

Well, we'll find out at some point. Whatever. They work. That's all that really matters to me.

[Sarah]

They work. The formulations are beautiful. And you can get them at Sephora.

[Kirby Johnson]

You can get [e-mail] of it. Yes, it is. Thank you to our friends at Amazon for sponsoring this news segment. Sarah, how often do you buy from Amazon?

[Sarah]

Literally every day. Sometimes multiple times a day.

[Kirby Johnson]

Wow. I have had to pat myself on the back for being so much more conscientious about buying stuff on Amazon. I love buying groceries on Amazon.

[Sarah]

Great.

[Kirby Johnson]

That's been so helpful for me personally, because I can just go through and see the same things that I order every week and stay consistent on, like, my total schedule. But I also have beauty subscriptions. Do you get a subscription every month?

[Sarah]

Oh, yes. Yeah. So I feel like the gateway drug for Me was having children. And I don't know how people have kids without having an Amazon subscription. I don't think it's possible. So once that, like, opened up the floodgates, I was like, I could get everything, including my beauty on Amazon. Yes, the subscriptions are genius.

[Kirby Johnson]

Beauty is one of the fastest growing categories on Amazon. That's not really surprising at this point. Amazon is reaching more than 100 million unique beauty consumers per month in the U.S. wow. I wonder if they're trying to buy sunscreens from overseas or something. Amazon Beauty has incredibly broad and diverse customer reach, from Gen Z to Baby Boomers.

[Sarah]

Oh, yeah.

[Kirby Johnson]

So where I feel like Sephora generally kind of leans more Millennial. Gen Z, maybe now Gen Alpha and maybe Ulta is more like Millennial to Boomer. Yeah, this kind of runs the gamut.

[Sarah]

I feel like, because, like, if you're in a family, you're all on one account, no matter where you live.

[Kirby Johnson]

Oh, you're right.

[Sarah]

So if you have your, like, high school kids or even college, like, you change the address, but you're still under, like, the prime and you can have it same day.

[Kirby Johnson]

Sometimes I curse the day that we didn't have Amazon prime in college. Can you imagine?

[Sarah]

That's why I feel like. I mean, there's a lot of reasons why beauty is booming on Amazon, but the access to all of the products and then the fact that you can get it literally sometime same day, if not the next day, like between it's like 5 and 7am before you wake up.

[Kirby Johnson]

Yeah. It's just there.

[Sarah]

Great.

[Kirby Johnson]

I love that you can just put prime and see when or like the day that you need it. It's like same day. Great.

[Sarah]

It's amazing.

[Kirby Johnson]

If this were us maybe five or six years ago, I'm sure there's episodes of us where we're like, heed, be cautious.

[Sarah]

Yes.

[Kirby Johnson]

You don't know if these are actual legitimate products. Exactly.

[Sarah]

And I feel like that was before they really perfected their storefronts.

[Kirby Johnson]

Yes.

[Sarah]

Now it's like such a beautiful shopping experience. Sometimes you don't even realize you're like, on Amazon. It's like you have these brands, you know, obviously build out their storefronts and it looks almost exactly like what you would be shopping on their website. It's extremely legitimate. It's beautiful. Sometimes they have, you know, exclusive products that you can't get anywhere else. Whereas, you know, a few years ago, like you said, we'd have to be like, where is this actually coming from? The actual brand? Is it third Party?

[Kirby Johnson]

Yeah. Is this some kind of random brand pretending?

[Sarah]

Yes.

[Kirby Johnson]

However, Amazon does know that that was a problem at one point. So they created this thing called the Brand Protection Report. They reached out to Sarah and myself and they said that they're proud of the progress that the company has made in preventing counterfeits within its store and will not rest until they drive counterfeits to zero. So basically, in my interpretation of this, they saw that people had hesitancies, that they were scared and they said, all right, we're not gonna just try to eradicate some of this problem. We're gonna try to literally make it so that you cannot, it's not even a possibility to have counterfeits on our platform.

[Sarah]

Yeah.

[Kirby Johnson]

Amazon does a few things to help get it to this point or to aspire to get to this point, which is they aggressively pursue anyone who violates its zero tolerance policy for counterfeit products and they make sure that they are held accountable. In 2024, Amazon identified, seized and appropriately disposed of more than 15 million counterfeit products worldwide, preventing them from harming customers and being resold elsewhere in the retail supply chain. Which I actually really love that this call out exists because. Okay, great. You, you made sure they were not on your storefront. They're going to try to go somewhere else to sell them. They are actually taking the steps to make sure that these can't go anywhere else.

[Sarah]

Yeah.

[Kirby Johnson]

Which also is a deterrent for the people doing it because then they just have stock that they can't sell.

[Sarah]

Totally.

[Kirby Johnson]

You know what I mean?

[Sarah]

Yeah.

[Kirby Johnson]

Counterfeiting is a huge problem across the entire retail industry. I mean, there's a reason why there are lawsuits to the tunes of hundreds of billions of dollars every year surrounding this. And that's why Amazon told they are so focused on combating it. And you guys know we did Amazon surprise last year, which was so fun. We went to Amazon Studios and filmed with Patty Dubroff and did our own little Amazon surprise. So they are seeing and hearing the feedback not only from its customers, but from the brands that they work with as partners on their site. Which I feel is good because if I'm a brand founder, I'm like, if you're not helping get my. It's not just dupes, it's like literally fake product that could be potentially harmful to somebody.

[Sarah]

Yeah. Amazon uses advanced technology to verify products is genuine, simplifying brand protection for selling partners and safeguarding customers. When a product is enrolled in Amazon's transparency program and is listed for sale, Amazon can verify that the Code is authentic before a product is shipped, ensuring only authentic products are delivered to customers. So more than 2.5 billion product units are verified as genuine. Beauty is one of the fastest growing categories within Amazon. As Kirby mentioned, with customers buying over a billion beauty products from Amazon just last year.

[Kirby Johnson]

Yeah, I mean, I think that now when we talk to people about where they're buying their beauty products, especially with Los Angeles Confidential, Amazon is definitely high in the running.

[Sarah]

Yeah.

[Kirby Johnson]

However, we want to make sure that you guys, if you're buying, you know who you're buying from and what you're buying. And we've mentioned this previously on an episode or two, but we want to walk you through how to make sure that you're buying from an actual brand storefront. Thank God. And you're so right, Sarah. These storefronts have really changed everything because you can easily just click on who the seller is and then go look and be like, oh, that product is not usually sold with a bunch of other brands.

[Sarah]

Exactly.

[Kirby Johnson]

Like, this is weird. When you're shopping, double check that you're buying from the actual brand storefront in the small chance that a price looks too good to be true. This is a big one where you're like, oh my God, I can get blah, blah, blah, sunscreen for like $5. That's probably a red flag. Or like an image looks a little sus. If those things are sus to you, then you definitely should not be purchasing it from that storefront. You also wanna look on the brand website to see if they list Amazon as a partner. Most brands do this, some may not. So I wouldn't use that as like the Bible by any means. But then also what I like to do is I will go to Google and in quotes, put Amazon, whatever brand name I'm looking at and to see if it pulls up. Any legitimate publications that have mentioned that you can buy their products on Amazon or link out to Amazon because typically if it's on editorial website.

[Sarah]

Right.

[Kirby Johnson]

They vetted it through affiliates.

[Sarah]

Exactly.

[Kirby Johnson]

So they know that it's actually being sold for real on Amazon.

[Sarah]

Can I add one more?

[Kirby Johnson]

Of course.

[Sarah]

One of my favorite things about Amazon is the review part. Obviously that you can leave your review for the product sometimes. And I'm not gonna say this is like again, Bible, but if it's a very popular product, most of the time it has a lot of reviews. If it doesn't, that's, that's very suspicious. If it has like one review, like you're like, I feel like this product has been out For a while. So it should have more reviews. And then also Amazon does this amazing thing where it flags if there's been a lot of returns. Yes.

[Kirby Johnson]

I was gonna say that is my favorite feature now where it's like, hello, this product has been returned.

[Sarah]

Yes. Like frequently.

[Kirby Johnson]

Frequently. And I immediately like, this is not good.

[Sarah]

No.

[Kirby Johnson]

Even if it's. I don't even. It doesn't mean that it's counterfeit. It could just mean that it sucks.

[Sarah]

Exactly.

[Kirby Johnson]

I'm like, yeah, I'm not going there. I'm not doing it.

[Sarah]

It was my favorite thing about it.

[Kirby Johnson]

No sense. That most brilliant thing they have done.

[Sarah]

Truly look out for the reviews. Most of the time, Amazon has already flagged it and has taken down that storefront. But sometimes, you know, like, these people are quick. So just look at the reviews and make sure that, you know, it's. It seems legitimate.

[Kirby Johnson]

And then also you can make claims to Amazon. They give you a guarantee as a customer. So if you buy items sold and fulfilled by an independent seller, it covers both the timely delivery and the condition of your items. So you can make a claim directly to Amazon and they will determine if you are eligible for a refund. I have to tell you, I return things to Amazon all the time that I'm like, oh, actually I didn't need this. This doesn't work for me. Whatever. I will buy tech for my phone for recording and filming and stuff. And then sometimes when it comes, it doesn't work or it didn't come with the part that I needed. The return process has always been so smooth. I take it to Whole Foods.

[Sarah]

Yeah. Customer service for Amazon is really great.

[Kirby Johnson]

And then also Amazon wanted us to know. Cause we were like, well, can like, let's say you see that there is a counterfeit happening?

[Sarah]

Amazon Crime Stoppers.

[Kirby Johnson]

No, literally, Amazon Crime Stoppers. Yes you can. So this is how you report suspicious activity. I love doing this. This is the me, of course, Kirby does. This is the justice oriented person in me where I'm like, you're going down. You're going down.

[Sarah]

Okay.

[Kirby Johnson]

So it says that if you believe that any product, seller or activity is suspicious, follow these steps to report it. The product page will have a place that you can do this. You can do this on desktop, mobile or the shopping app. You just navigate to the product page. You select report an issue with this product or seller and then select this product or content is illegal, unsafe or suspicious. Or I have an issue with the seller. I personally have an issue with counterfeit sellers to report suspicious activity and Then you follow the prompts to enter details about your issue and you can submit it.

[Sarah]

You can count this as your volunteer work helping the community.

[Kirby Johnson]

I think Amazon Crime Stoppers would be an amazing reality show or just people.

[Sarah]

Knock on people's doors, show us your sunscreen.

[Kirby Johnson]

They're in the back like putting stuff in boxes. Okay, so if you want to learn more about this brand protection report and how Amazon is keeping you safe from counterfeits, frauds and other forms of abuse, we recommend that you take a look at the report. It's very. I mean I found it interesting because I like data and I like learning stuff about this.

[Sarah]

Who doesn't? Thank you Amazon. Okay, Kirby, let us let's talk about this story that you recently reported in your newsletter.

[Kirby Johnson]

Ahead of the group 13 Loon founder Nikao Grieco is being accused by investors of securities fraud, embezzling company funds for Taylor Swift tickets, family vacations and more. I did talk to Nikayo myself after reporting this prior to publishing and she gave me a statement over the phone. We talked for about 20 minutes. She refutes everything and every claim that's been made against her in this filing. 13 loon, if you don't know, is this retailer that was primarily focused focused at the beginning on black and brown founders, smaller independent black and brown owned beauty brands. Specifically it was co founded in 2020 by Nikao and her co founder Patrick.

[Sarah]

Herning, who was a founder of 11 Honore, which made luxury plus size clothing.

[Kirby Johnson]

But in the last year, 13 Loon has been riddled with many, many problems. There were many vendors that claimed they had not been paid thousands of dollars worth of invoices from 13 Loon's partnership with J. JCPenney got involved and said, okay, we are now circumventing 13 Loon. We will be fulfilling all of these things for these brands versus 13 loon having to do so.

[Sarah]

Yes. So I don't know if we've talked about this before. I think we did on a previous. I think we did, yes. So 13 Loon was basically like the beauty retailer within JCPenney the way that like Sephora is inside Kohl's.

[Kirby Johnson]

Yes. So that announcement is made and JCPenney basically just says we want everyone to be happy. We're jumping in so we can make sure everybody is taken care of. Then in late 2024, 13 Loon was acquired by SNR Capital through an insolvency process called Assignment for benefit of Creditors or an abc. And while this may have been a positive thing for 13 loon it was positive because it essentially kept them from. It was an alternative to bankruptcy. Yes, they weren't gon. They weren't filing for bankruptcy. Instead, this ABC happens and S and R Capital acquires the company in this new vision for 13 Loon 2.0, if you want to call it that. When this ABC takes place, her co founder Patrick Herning exits the company and Grieco becomes the CEO. And the plaintiffs in this case, who are Beauty Generations Fund 1LP and Relevance Capital 4LP. The former is the venture capital fund that's managed by the latter and they include 13 loon in their portfolio. And their complaint is filed against Nikao and I think like six or seven others. Other defendants. But they are claiming that she, as CEO and the other named defendants, allegedly falsely represented and concealed material information regarding the financial condition of the company and its intent to repay the debt. Repay its debt. According to this lawsuit. It was filed March 4th in Los Angeles. They allege 17 different complaints against her, including embezzlements of funds, family vacations, beauty treatments, concert tickets, streaming service fees, etceter, etc while the company was in significant debt. These are huge claims that are have been made and I'm going to read an excerpt from the court filing. Nikao Grieco wasted no time focusing that goal on herself as she sought millions of dollars from investors while personally enriching herself and her family. Ignoring shareholder requests and later demands for information, Nikao Grico worked with other named defendants to orchestrate an assignment for the benefit of creditors, leaving shareholders in the dark and anointing herself as the new CEO. On the other end of the ABC, the name defendants entice a $10 million valuation demonstrated through an offer made to the plaintiffs yet commenced in ABC for the purpose of wiping out equity and without reasonable consideration. This suit also states and alleges, okay, that the Net revenue for 13 Lune dropped from $24 million in 2023 to 7 million in 2024 when the ABC took place. Niko has substantial ownership in 13 Lun despite not investing any of her own money into it. That 13 lune has substantial credit card debt. That's a lot of legal stuff that I'm sure your head is spinning. You can read literally all of the details that you would like to. One of the points of contention though, that I think is like, almost like the basis of this is that the plaintiffs are claiming that they were offered an opportunity to invest in 13 Loon 2.0 last November. That I think is like the bigger issue. I think that's what Started the ball rolling here where they felt that they were not getting clear communication not only about the ABC but about the financial status of the company. They say that the ABC took place months ago, but they still do not have any basic financial and contract information that they've repeatedly requested from the defendants. That's why they are taking action at this point. The personal spending is really interesting. I asked Nikayo about this. She said that that she was not responsible for approving finances, financial expenses or spending, that she was simply the face, the chief innovation officer and the co founder of the company as well as the secretary of the board of the original 13 loan and that she was not responsible for approving any finances or any of the day to day finances whatsoever.

[Sarah]

So basically she is saying that she in other words, was approved to spend the money the way that she did?

[Kirby Johnson]

Yes, she says that the lawsuit is completely baseless and that she looks forward to debunking it in court. She stated that the restructuring of the company was properly handled and that when I pressed her about the claim that the plaintiffs did not have adequate transparency regarding the ABC that took place, she said that that claim is false and that anyone who had voter shares voted yes for the ABC process except for Relevance Ventures. One of the plaintiffs who did not vote at all and she said that they were given the opportunity to vote just like every other vc that she included them in constant communication regarding the process, the bylaws, the votes that were voted on by all board members and existing venture capitalists outside of Relevance Ventures who did not participate in voting for the abc. When I asked her about the false valuation claim, she said that the plaintiff wrote the valuation for this company and worked with previous management to bring that valuation out to market. She said that regarding defendant Riley taking the offer off of the table to invest in 13 loon from the plaintiffs that that is false information. The investors bringing the suit inquired about investing in the new company but the new company was not in an active raise at that time and they were informed to end things. She says. I'm absolutely shocked by the case that I as a black woman in today's current environment that was one of the board members of the previous company to be the one that has been sued. And to that point, for an investor I did not know well to have access to bank documents and to obtain certain documents that no other LP or VC of our company has ever seen, to show up in a lawsuit by someone I barely know, I find shocking. It seems to me that for any management or VC not moving forward and a part of the new company comes off as sour grapes. So it's a lot. The accusations, there's many of them. Again, they are accusations. I'm just making that very clear. All of this is alleged. This is also a developing story. If you know anything or you have anything to share, my inbox is always open. You can also DM me on Instagram. But if you would like to support independent journalism, you can subscribe to Ahead of the Curb. It's my substack. It's literally kirby.substack.com and it will help me to keep covering stories like this.

[Sarah]

So there's a hearing that is set in August.

[Kirby Johnson]

Yes, you're right. There's a hearing set in August and we'll go from there.

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