The founders of Tribe WOD, a prominent cross-training and fitness equipment manufacturer, have filed a lawsuit against brand aggregators Factory 14 and Razor Group, citing deceit, fraud, breach of contract, unfair and deceptive trade practices, and unjust enrichment, among other offenses.
The lawsuit, filed in Massachusetts Superior Court, alleges that the defendants, Factory 14 and Razor Group, failed to fulfill promises made during the acquisition of Tribe WOD. Alleged breaches of the agreement include failure to make earn-out payments as well as failing to provide access to business records all outlined in the acquisition contract.
Originating from a humble Massachusetts garage, Tribe WOD founders Alexandre Vitet and Jared Bane built their company into a $2.5 million enterprise before selling it to Factory 14, which later resold it to Razor Group. Despite promises of global expansion, enhanced marketing, access to industry experts, and potential earn-out payments, the plaintiffs argue that the defendants neglected their commitments, substantially harming the company and disregarding U.S. laws and business practices.
Tribe WOD, which launched in 2019, swiftly grew to over $2.5 million in sales in just a few months, establishing strong sales channels via Amazon, Shopify, and various online platforms. This success attracted several potential buyers, with Factory 14 standing out due to its promise of multiple payments tied to Tribe WOD's annual earnings through earn-outs.
The lawsuit contends that shortly after the acquisition, Factory 14 sold the assets of Tribe WOD to Razor Group, bypassing an anti-assignment provision in the original agreement. It is alleged that Factory 14 knowingly withheld information regarding this potential transaction from the plaintiffs. According to the lawsuit, Vitet and Bane had doubled revenue year-over-year and had expected to, at a minimum, match that. The lawsuit states that based on the promises made during the courtship and due diligence phase, there were immediate red flags after signing the acquisition agreement, and the situation quickly spiraled downward.
Moreover, the complaint asserts that both Factory 14 and Razor Group systematically dismantled Tribe WOD, dismissing in-house creative content specialists and neglecting basic operational necessities. According to the lawsuit, Factory 14 and Razor Group failed to comply with federal and state tax, wage, and import laws and otherwise mismanaged the business financially. The lawsuit also states that the defendants had no U.S. bank account or credit card and were unable to obtain either and thus were unable to pay any of the companys bills. The lawsuit alleges that the failure to pay basic bills led to lost revenue and the ability to serve existing customers or expand to new markets.
The plaintiffs claim that their consulting agreements were prematurely terminated and allege that income from Tribe WOD was siphoned off to other businesses. The lawsuit alleges that Factory 14 and Razor Group essentially turned a thriving brand built by the founders with a rabid customer following into an Amazon seller with no identity, and loaded with unnecessary fees.
The lawsuit seeks compensatory and multiple damages and injunctive relief, compelling the defendants to provide accurate and complete financial data.
Interestingly, Razor Group faces a similar lawsuit in Texas, as it is being sued by the founders of Kettlebell Kings in a case with similar allegations. On its website, Razor Group states that it is trusted by leading investors Blackrock, Victory Park Capital, and Fortress among others.
The Tribe WOD lawsuit was filed in Massachusetts Superior Court by Garage Sweat, LLC f/k/a Tribe Wod, LLC, Jared Bane, and Alexandre Vitet against Factory 14 UK Acquisition IV, Ltd., Razor Group GMBH, and Razor Group USA, LLC. This case has been accepted into and will be litigated in the Business Litigation Session, a business-focused sub-department of the Massachusetts Superior Court sited in Boston, Suffolk County, Massachusetts.
Source: Garage Sweat, LLC f/k/a Tribe WOD, LLC
John P. David
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