Hermès files suit Against LVMH

Summer may be officially over, but things are heating up in the fashion law world. Hermès International has just announced that it it filed suit against LVMH in July for insider trading and manipulating stock prices. This is two years after LVMH revealed that it had accumulated a large percentage of Hermès stocks through cash-settled equity swaps that allowed it to circumvent the usual market rules requiring firms to declare share purchases.

Hermès saw this as an attempt to take control of the company, which prompted it to take two major legal steps to protect itself from what it considers to be an unwelcome suitor. First, it scored a major victory last year when a French court authorized Hermès to group family-owned shares into a nonlisted holding company. The ruling created a safeguard for the Dumas, Puech and Guerrand families' ownership of more than 70 percent of the shares in Hermès International. Now, the maker of the Birkin bag is going directly after LVMH in what is sure to be a clash of the luxury titans. We will be sure to keep you posted on the progress of this case.