BoldFace Group Inc., the developer of the Kardashian Beauty brand, has been placed under receivership after defaulting on loans.
The Superior Court of the State of California in Los Angeles appointed David Stapleton receiver on September 3 at the request of Hillair Capital Investments LP. BoldFace filed a notification with the U.S. Securities and Exchange Commission on Sept. 8.
The company has until Oct. 17 to show cause why a receiver should not take over the company.
On Aug. 28, the company received an event of default redemption notice from Hillair, which is demanding repayment. Hillair is looking for repayment of almost $3.3 million in debt, according to an Aug. 29 filing with the U.S. Securities and Exchange Commission. Hillair invests in small and micro-cap public companies.
BoldFace has other agreements with Hillair that it has not defaulted on. In late August, the company executed several promissory notes with Hillair for $480,000, $460,000 and $309,000. The notes mature July 1.
The brand uses the faces of reality television personalities and boutique owners Kim, Khloe and Kourtney Kardashian. The family came into the spotlight when the late Robert Kardashian (father of Kim, Khloe and Kourtney) acted as former NFL player O.J. Simpson's defense attorney when he was acquitted of murdering his wife, Nicole Brown Simpson and her friend Ronald Goldman. Adding to the family's public image, Robert's ex-wife Kris, the Kardashian matriarch, has been married to Olympain Bruce Jenner since 1991. The family's reality television shows, which air on the E! network, include "Keeping Up with the Kardashians," Kourtney and Kim Take Miami" and "Khloe & Lamar."
BoldFace had about $4.3 million in revenue for the nine months ended March 31, compared with about $5.4 million in revenue for the same period the previous year.
The company's auditor, Friedman LLP, raised substantial doubt about BoldFace's ability to continue as a going concern, or without the threat of liquidation, because of historical losses and lack of capital, according to an Oct. 15 SEC filing.
BoldFace had said in a June 20 SEC filing that it planned to either generate enough cash for operations, or raise equity or debt financing to stay in business. BoldFace's other projects include developing products licensed with television host Mario Lopez and the toy brand Uglydoll.