The Kardashians have maxed out their good will
More than a month after pulling out of a debit card venture that had attracted nothing but negative attention, the company that licensed Kim, Kourtney and Khlo's images has sued the sisters, mom Kris Jenner and their company Dash Dolls for $75 million, claiming they breached their contract by abruptly terminating the deal.
Revenue Resource Group's complaint, filed Thursday in Fresno, Calif. and obtained by E! News, states that the Kardashians had a two-year contract and that RRG has been weathering a bad PR storm since the E! stars pulled out.
And why did they do that again?
Upon its launch in November, the Kardashian Prepaid MasterCard was immediately criticized for harboring hefty hidden fees to activate, replace, etc. Consumers Union, which publishes Consumer Reports, dissed the card, and the Connecticut Attorney General's Office demanded further disclosure from card issuer University National Bank, accusing the Kardashians of "marketing a dangerous financial fantasty."
Not wanting to be linked to the alleged shadiness any further, the Kardashians' attorney sent a notice of termination letter to RRG on Nov. 29. Consumer Union issued a statement applauding the move. And it seemed as if the controversy had blown over...
But not everyone was applauding.
"The company waited a month to file hoping this would work out. They didn't want to sue," RRG head attorney Scott Rudd tells E! News.
RRG "spent a great deal of time and effort securing the rights to use the Kardashian card," Rudd says. "RRG is an independent sale organization, which gives it the right to market pre-paid debit card." The Kardashians walking away has "effectively put this company out of business."
As for the allegedly prohibitively high fees, Rudd says that the card fees "were in line with other debit cards."
Team Kardashian is not commenting on the lawsuit at this time. A case management hearing has been called for May 2.
(Originally published Jan. 7, 2011, at 4:55 p.m. PT)
--Reporting by Claudia Rosenbaum