Olivia lawsuit settled

  • by Heather Cassell
  • Wednesday February 18, 2009
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A bitter lawsuit filed against Olivia and its founder and current president Judy Dlugacz by former CEO Amy Errett in 2007 finally closed its sails February 3 when a San Francisco Superior Court judge dismissed the case.

The two out lesbian business leaders quietly settled their multi-million dollar battle – which brought wild accusations and finger pointing from both sides – out of court last October 18.

Errett sued Olivia for her share of ownership interest estimated up to $30 million – which potential investors assessed as the company's value, according to court documents – and lost earnings, six month's worth of severance pay and benefits for wrongful termination, breach of contract, and release from the non-competition clause of her contract.

Dlugacz hired Errett in October 2002 to assist with stewarding Olivia's growth. Under Errett's five-year tenure as CEO, which ended in early 2007, the company's annual revenues grew from approximately $6.8 million to an estimated projected $25 million, based on booked tours, according to court documents and Errett.

The most astounding example of the deterioration of Dlugacz's and Errett's professional relationship came when Errett called Dlugacz a "fucking idiot" and a "megalomaniac" in an e-mail to chief technology officer Brad Lande in 2006, according to court documents. Errett also expressed a desire to push Dlugacz out of Olivia, documents show.

Accusations of gross fiscal mismanagement, power plays to control Olivia, incompetence, mismanagement of company assets, self-dealing and nepotism, financial deception within management to price gauging customers, and attacks on each other's reputations were quickly taken out of the public eye and into closed case management mediation as the press caught wind of the scuffle in the fall of 2007.

This was in keeping with Olivia's wishes to keep the battle out of the media.

"We will not fight this in the media – we will fight it in the court of law," the company said in a statement released to the Bay Area Reporter in 2007.

All parties involved in the case: former employees Lande; Dianne P. Dubois, chief financial officer; and Sabrina Riddle, chief sales and marketing officer; and general manager Lisa Henderson and Lana Holmes, an organizational and business process optimization consultant for Olivia, who joined in defense of Dlugacz in July 2008, signed confidentiality agreements.

No one, including Dlugacz's and Errett's attorneys, would speak about the terms of the settlement.

"The case has been settled amicably," said Dlugacz, 56, who resumed the helm of the lesbian lifestyle company with her life partner of 30 years and business cohort, Rachel Wahba.

Dlugacz told the B.A.R. she is glad the case is over.

"I'm in control of the company at this point. I love what I do," said Dlugacz, who founded Olivia as a record company producing and promoting women's music with nine other partners in 1973. Dlugacz became the sole owner in 1984 and five years later she launched vacations for women, in particular queer women.

Errett said she wasn't at "liberty to discuss" the results of the mediation between Olivia and her, but said, "I'm happy with everything. ... There is a positive outcome for everyone involved."

Changing winds

While Olivia prepares to offer a cruise with Huffington Post founder Arianna Huffington in March, Errett has moved on as well. After a stint as an "entrepreneur in residence" of Trinity Ventures, a venture capital firm in Menlo Park, she joined Maveron as a partner last spring. Maveron is a Seattle, Washington-based venture capital firm that funds primarily technology related start-ups. Errett still resides in the Bay Area with her family and commutes one day a week to Seattle, she said. She has plans to open Maveron's San Francisco office this year.

Fresh from President Obama's inauguration, Dlugacz was excited about the change in Washington, D.C. that brought what she said felt like a sense of community and she is excited to bring Huffington's "free spirit" aboard Olivia's Caribbean Islands cruise.

Huffington, who Dlugacz anticipates will speak about the "political future with Obama" and the economy, will be on deck to speak to the guests only for the first night of the nearly full cruise, she said.

"The GLBT community has always been politically astute and politically active, so I am looking forward to speaking to the Olivia guests about the current political and economic landscape, and the challenges – as well as the opportunities – we will be facing in the coming year," Huffington said in a statement released by Olivia.

Dlugacz declined to reveal Olivia's current annual revenue. The company's financial statements aren't open to the public due to its status as a private company. In court documents Dlugacz estimated Olivia's value between $3.8 and $5.8 million.