CaaStle, the embattled fashion technology startup, is now confronting two additional lawsuits amid escalating allegations of financial impropriety involving its founder, Christine Hunsicker. This follows earlier disclosures of turmoil within the company, culminating in Hunsicker stepping down as CEO after accusations of financial misconduct surfaced.
One lawsuit has been filed by P180, a company originally established to invest specifically in enterprises that used CaaStle’s technology. According to legal documents, P180 claims CaaStle deliberately misrepresented its financial health, concealing critical details of its revenue streams and economic stability. Allegedly misled, P180 secured substantial financing, including several loans, only to later uncover the true condition of CaaStle’s finances. The suit describes how CaaStle attempted to push a merger between itself and P180, a move that consequently led P180’s investors to intervene, taking total control of its own board of directors. P180 seeks to recover over $58 million, demanding the rescission of agreements and the complete dissolution of business ties between the two entities.
Separately, apparel supplier EXP Topco is suing the troubled startup for breach of contract, alleging CaaStle failed to honor agreed-upon payments resulting from a previous copyright infringement settlement.
Beyond these two cases, investigations have suggested the possibility of a broadening legal battle, with rumors of a potential class-action suit in the works against an unnamed investment company responsible for funneling retail investor capital into CaaStle. Sources have indicated the company is actively considering bankruptcy proceedings, recently securing roughly $2.7 million to assist in navigating that complicated process. If CaaStle, which reportedly raised more than $530 million in total funding, has depleted its entire cash reserves, the resulting financial damage could mark one of the most significant startup fraud scandals of recent years.
Internally, former employees contacted by reporters expressed little surprise at the reports of economic distress, although none claimed first-hand knowledge of fraudulent activity. One former employee, who spoke on condition of anonymity, recalls company management rarely discussing the firm’s finances, observing that many staff members jokingly believed the startup was probably struggling to make money. Still, the scale of allegations has reportedly shocked former insiders, none of whom foresaw potential deception at this magnitude.
Requests to CaaStle for direct comment on these latest allegations have so far gone unanswered.
