Happy birthday, Martha Stewart – you’re getting slapped with a class-action lawsuit.
Conrad Hahn has filed suit against the diva of domesticity (right), charging her involvement in the ImClone scandal has “forever damaged” the value of her name and reputation – thereby ruining the value of the stock he owned in Martha Stewart Living Omnimedia.
The suit by Hahn, a retired Florida man, seeks class-action status and restitution for everyone whose stock in Stewart’s company has been devalued by the scandal.
Stewart’s lawyer, Robert Morvillo, said: “The lawsuit is totally without merit, and is worthy of no further comment.”
The suit says Stewart, who turns 61 today, is the one who made an issue of her good name and reputation in a 1999 prospectus before her stock went public.
“Martha Stewart, as well as her name, her image and the trademarks and other intellectual property rights relating to these, are integral to our marketing efforts and form the core of our brand name. Our continued success and the value of our brand name therefore depends, to a large degree, on the reputation of Martha Stewart,” the lawsuit quotes it as saying.
“Our business would be adversely affected if Martha Stewart’s public image or reputation were to be tarnished.”
Hahn’s lawyer, Guy Burns, said Stewart had an obligation to her investors to keep her nose clean, and she violated that duty by getting involved in the ImClone Systems insider-trading scandal.
Stewart, a close pal of former ImClone CEO Sam Waksal, sold almost 4,000 shares of the biotech company a day before the Food and Drug Administration announced a negative ruling concerning the firm’s experimental drug Erbitux.
Waksal has since been arrested on charges he tried to sell his ImClone shares and tipped off relatives to do the same after he learned about the FDA decision – but before the public did.
Waksal’s lawyers were said last week to be in talks over a plea deal as prosecutors threatened to arrest his daughter Aliza, who sold $2.5 million of ImClone shares just before the price tanked.
Stewart says she had no inside information from Waksal. Instead, she says, her broker sold the shares as part of an oral agreement to sell when the ImClone share price dipped below $60.
Although Stewart hasn’t been charged in the case, her role in the matter is being investigated – sending stock in her company plummeting. It had been trading at $19 a share before the scandal, but ended the day yesterday selling for $8.51.
Burns said his client had bought 350 shares of the stock at $19 a share for his retirement fund, and was recently forced to sell it off for about $10 – and he holds Stewart responsible.
“Regardless of Stewart’s criminal culpability for insider trading, by putting herself in a position that compromises her integrity and casts the specter of doubt on her public image or reputation, Stewart has breached her fiduciary to MSO shareholders,” the suit says.
MSO is the stock-ticker symbol for Martha Stewart Living Omnimedia.
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LEO
It’s been a tough year for Martha Stewart.
Trouble with Kmart. Trouble with stock sales. Reporters hounding her.
But as she celebrates her 61st birthday today, The Post can report that a much better year is in the stars.
According to an astrological reading commissioned by The Post, the domestic doyenne can expect to emerge from her recent days of turmoil and stress stronger than ever. “She will likely find a way out of this mess,” said Susan Miller, the creator of Astrologyzone.com.
Miller did a horoscope based on Stewart’s time of birth – 1:33 p.m. on Aug. 3, 1941. Stewart is a Leo, with Scorpio rising and a Sagittarius moon.