Troubled startup CaaStle is now facing two new lawsuits and more allegations

CaaStle, the troubled fashion startup whose founder, Christine Hunsicke, was accused of financial misconduct by its board of directors, is now facing lawsuits from a partner and a supplier over missed payments and additional allegations of fraud.

As reported by Axios and seen in lawsuits obtained by DailyTech, CaaStle is being sued by P180, a vehicle it established to invest in companies utilizing CaaStle technology, and by EXP Topco, an apparel company claiming non-payment after a settlement for copyright infringement.

A representative from CaaStle did not respond immediately to DailyTech’s request for comment.

The P180 lawsuit alleges that “Nothing about CaaStle was true,” stating that CaaStle concealed income and financial stability details from P180 and fraudulently induced them to raise capital and take out loans. The suit also mentions an attempt by CaaStle to force a merger. P180 seeks recovery of over $58 million in damages.

EXP Topco is also suing CaaStle for breaching a settlement agreement by failing to pay fines related to copyright infringement.

Axios reports rumors of a potential class-action lawsuit against an investment firm that brought retail investors to CaaStle. Hunsicke resigned from the board and CEO position amid the investigation into financial misconduct.

The company is considering bankruptcy and secured $2.7 million in financing. CaaStle raised over $530 million, with its last round in 2019 totaling $43 million.

In April, the board confirmed financial difficulties, leading to employee furloughs. If the $530 million is lost, this could become a significant startup fraud case. DailyTech spoke to former employees who were not surprised by the financial troubles but did not witness fraud.

One former employee mentioned the lack of updates on the company’s financial health and expressed surprise at the fraud allegations.