The co-head of a popular lip balm maker bled his company dry to fund his “lavish lifestyle” — and then called the cops on his business partner after he complained, according to a new lawsuit.
Jonathan Teller, co-CEO of EOS, which makes a popular egg-shaped lip balm sold at drugstores, used the company as his personal piggybank — withdrawing $100 million to buy an $11 million Park Avenue apartment and a newly constructed “opulent” house in the Hamptons, according to the NY state court lawsuit.
Teller also used company funds for private jet travel, to hire his friends as event planners and interior decorators for the office — and to hire a “fortune teller” to advise the company on expansion plans, the lawsuit claims.
The spending upset Teller’s business partner and fellow EOS co-CEO, Sanjiv Mehra, who tried to enforce “financial discipline,” the lawsuit claims. That resulted in Teller booting Mehra from the company — and calling the cops when he refused to leave, Mehra claims.
On Sept. 26 Mehra was escorted out of the company’s offices at 19 W. 44th St. by NYPD officers after Teller and the company’s general counsel Sarah Slover — who is also named in the complaint — denied Mehra access to his computer, cut off his company email account and essentially kicked him out of the company, the suit alleges.
Teller called a board meeting — Mehra and Teller are the only directors — on the 26th to approve a vote to remove Mehra from the holding company in which they are co-equal partners, but when Mehra refused to vote on the proposal the cops were called to the building, according to the complaint.
“Teller made vague, unsupported allegations of Mehra being a ‘negative force’ ‘dishonest’ and ‘difficult to work with,’” according to the complaint.
Neither Teller nor Eos, which was also named as a defendant, immediately returned a request for comment.
Mehra, a former Pepsico and Unilever executive, says that he has received no formal notice that he has been fired, but accused Teller of blabbing to their business contacts that he “is no longer associated with the company,” according to the complaint.
The former business partners shared an office together, sitting four feet apart, for 10 years, Mehra told The Post, insisting that he and Teller “never had a disagreement about the business,” except when it came to Teller’s spending.
The funds Teller withdrew “impaired the business’s liquidity and hampered its growth,” the complaint alleges.
What’s more, Teller’s contributions to the operations of the company were not commensurate with the amount of money he took, according to the complaint.
His role was “limited primarily to providing financing (which came mainly from his mother),” according to the complaint.
Founded in 2006, EOS launched with a shaving cream product but hit its stride when it introduced the lip balms several years later, growing to $25 million in revenues in 2011 and reaching a peak in 2015 of $200 million, according to the complaint.
Around that time, Teller’s spending hit its stride as well, the suit alleges, including the jet travel and the hiring of the fortune teller, according to the complaint.
The spending “drained the company’s cash position” which was further depleted after litigation in 2016 when a class action lawsuit was filed against EOS alleging that its lip balms caused “flaking and bleeding.” The lawsuit was settled 15 days after it was filed, but the company also settled 10 related class-action lawsuits, according to reports.
EOS employs about 70 people at its New York headquarters and it also has offices in London, Mexico City, Berlin, Shanghai, Stockholm and in New Jersey, where it operates a lab, according to Mehra.