The investors claim they were told that “Selena Gomez, one of the most famous women on earth, with a billion-dollar brand and a platform unmatched in social media, would be actively building the company as its head of marketing”.
Gomez’s attorney Matthew Rosengart says their allegations are “vague, generalised and contradictory” and that Gomez never agreed to, and did not, manage the company, or make the kind of commitments they are suggesting.
“The claims against her are meritless if not frivolous,” he said.
Mr Rosengart added that the legal team was “exploring other avenues of relief for Ms. Gomez including sanctions against plaintiffs”.
The emphatic pushback from Gomez may reflect a concern for her reputation but it also leaves her mother in the hot-seat, facing the fraud allegations alongside the company itself and a third co-founder.
Crisis PR commentator, Lauren Beeching, founder of Honest London says Gomez is far from the first celebrity to try working with a close family member. At times it can come off like in the Jenner-Kardashian household or with the tennis-playing Williams sisters.
But there are plenty of examples – from the Beckhams’ to Britney Spears – where family brands and business don’t mix well.
Working with close relatives, whether that’s a sibling or a parent, or someone else is almost always a higher risk approach, says Beeching.
“It can make the boundaries between the personal relationship with the business and the celebrity’s reputation much harder to separate,” she says.
The natural level of trust means that you might not apply the same rules as you would in a normal commercial relationhsip, so better guardrails are needed, she says.
“If you’re going into business [as a] family, I’d put more structure around it, not less, for sure.
“Define everybody’s responsibilities, bring in independent oversight, and decide what happens if something goes wrong before something goes wrong.”
“A family relationship shouldn’t be a company’s governance structure.”
At the end of the day Gomez may not need to worry too much over this case, says Beeching.
“This will generate headlines because Selena Gomez is enormously famous, but I don’t think it’s the type of story her core audience is particularly interested in,” she says.
“There’s an important difference between generating negative headlines and causing lasting reputational damage. “
Still, for celebrities considering trading on their personal brand, Beeching does have words of advice.
“Before lending your name to a company, don’t ask what your reputation could do for the business. Ask what that business can eventually do for your reputation as well.”
