Melania Trump and John Menard appear in need of relationship counseling.
Trump testified Thursday in federal court in Indianapolis that she would still promote her “Melania” line of skin care products if only the Menard-controlled company that makes them, Indianapolis-based New Sunshine LLC, would honor its contract with her.
New Sunshine wanted to keep seeing Melania, too, according to attorneys for the Menard Inc. hardware store chain and its co-founder, John Menard, who gained control of New Sunshine earlier this year.
They suggested that, in spite of a contract they consider invalid, New Sunshine tried to keep working with Trump. But instead of smoothing out their differences amicably, she sued in arbitration for $50 million in damages.
“Were there any efforts to work things out?” Kevin Tyra, an attorney for New Sunshine and Menard, asked Trump on Thursday morning.
Tyra noted that an attorney for Menard had suggested a proposed resolution in a letter to Trump on March 20, but the only response from Trump was her filing for arbitration two days later.
But Trump, a former model who is now wife of real estate tycoon Donald Trump, wanted to talk only about New Sunshine’s failure to live up to the contract it had signed with her a year ago. The company has paid her only $250,000 of the $1 million in upfront payments it promised.
“They didn’t honor the contract, they didn’t pay me, they didn’t promote the product, they didn’t do anything,” Trump said of New Sunshine. She added, “I did everything and I will do more, much more, if they will honor the contract.”
The discord between Trump and Menard is fallout from a larger fight between former partners Menard and Steve Hilbert, who co-founded a private equity firm in 2005 and used it to purchase New Sunshine.
Menard, frustrated by the poor performance of the MH Private Equity fund, sued to remove Hilbert as the fund’s manager. He won a temporary court order in February allowing him to do so.
Hilbert contends that Menard has gone after him only because Hilbert’s wife, Tomisue, spurned Menard’s sexual advances toward her.
“John Menard doesn’t like to be told 'no,' and my wife told him 'no.' So that’s where we are,” Hilbert said Wednesday after giving testimony in the dispute between New Sunshine and Melania Trump.
Attorneys for Menard claim that Hilbert used his position as manager of MH Private Equity to enrich himself, including signing a one-sided contract with Trump that gave him the right to receive $50,000 in free skin care products each year.
Hilbert contended Wednesday that those products were intended as handouts to friends, to help promote the new Trump skin care line.
Trump said Thursday that she had been working, on and off, for more than a decade to develop her own skin care products line when Hilbert phoned her in early 2011 about working with New Sunshine to create one.
“I was always interested to do the product, the skin care line,” Trump testified Thursday. “I was doing [it] at home and mixing and talking with chemists.”
Upon questioning from Tyra, however, Trump acknowledged that the only “chemist” she actually talked to was Tammy Fender, an aesthetist who has developed her own line of skin care products.
“Well, she has her own line out,” Trump said, adding that she considered Fender to be a chemist. “I used her. She did a lot of facials for me.”
Trump testified that she did substantial work developing the skin care products with New Sunshine even before the two sides signed a formal licensing agreement at Trump Tower in New York City on Nov. 1.
That same day, during the filming of an episode of Donald Trump’s show “Celebrity Apprentice,” Melania Trump and New Sunshine chemist Angie Provo promoted the new skin care products.
But between the filming of the show and its airing April 7, everything changed between Trump and New Sunshine.
On Nov. 27, John Menard, through his investment entity Merchant Capital, sued in Wisconsin court to remove Steve Hilbert as manager of their private equity fund, MH Private Equity.
A judge granted that request Feb. 19, and, on March 1, Menard installed the manager of his hardware store in Avon as the new CEO of New Sunshine.
On March 5, the new CEO, Matt Cotton, sent an email to Melania Trump saying there had been “some changes” at New Sunshine, but that he expected they would be “unnoticeable” to Trump and would not affect the launch of her product.
That proved completely wrong. On March 15, James Anderson, general counsel for Menard Inc. and Merchant Capital, sent an email to Melania Trump declaring New Sunshine’s contract with her company “void and unenforceable.”
But Anderson also expressed hope at working out a resolution with Trump's company, Melania Marks Skincare LLC.
On March 20, Anderson followed up with a specific proposal of new terms. But on March 22, Trump’s company filed for arbitration.
Even so, on March 27, New Sunshine shipped the Melania skin care products to Lord & Taylor, which was the “exclusive launch partner” for the introduction of Melania Trump’s skin care products.
Trump said that she and New Sunshine also had deals in the works with such retailers as Bloomingdale’s, Nordstrom, Sephora, Saks Fifth Avenue, Macy’s and Dillards—although none of those deals have come to fruition.
Lord & Taylor has said it received that shipment April 1 or 2. But Melania Trump testified Thursday that the shipment did not arrive in time to have products available on Lord & Taylor’s store shelves on the morning of April 8—the day after the “Celebritty Apprentice” episode aired.
“It was not in the stores, so they couldn’t buy it. It was not, and I have the proof,” Trump told Tyra.
“What’s the proof?” he asked.
“I got a lot of sad responses back from my fans [on Facebook and Twitter] that they tried to buy my skin care line, because it is not available,” Trump said.
“So people were tweeting you that it wasn’t available?” Tyra asked.
Also on April 8 and in the following days, Melania Trump did several media interviews and appeared on such TV shows as "The View." She said she went ahead with that promotional work, in spite of the contract dispute with New Sunshine, because it had been booked in advance.
In May, New Sunshine sued Melania Trump, asking a court to declare its contract with her company void. That decision now lies before U.S. District Court Judge Jane Magnus-Stinson.
If she finds in favor of Trump, the contract dispute will go back to arbitration in New York. If she finds in favor of New Sunshine, the partnership with Trump will dissolve or the two parties will be compelled to come to new terms.
Melania Trump has also asked Magnus-Stinson to award her company damages because of the dispute. If Trump wins this trial, those matters will be decided by a later trial.