A Tale of Schadenfreude: Guess? Jeans co-founder Georges Marciano and the Accountants Who Fought Back.

Here is the tale of a man who found riches in the rag trade; then turned on his employees who in-turn fought back—and won.

Guess? Jeans co-founder Georges Marciano is by many public accounts a creative man with an impeccable eye for design. He has an eye for fashion, art, and beautiful women. He is credited with discovering Anna Nicole Smith, and making her into a fashion femme fatale as the commercial muse for his jeans empire. He has also been described as a man with “a volatile personality” –a “jerk” who binged on pain medication, and was “unhinged from reality.”

It is the second description that seems to have been the cause of a nearly six-year court battle that some have suggested makes this self-made man into a self-destroyed man.

His life is the stuff of a Jackie Collins novel—from a stable of Ferrari’s  and a run for governor; to divorce, fights in bankruptcy courts and court judgments in the hundreds of millions of dollars for libel, defamation, and  intentional infliction of emotional distress—leveled at him not by his ex-wife, but by his accounting staff.

According to legal documents, on August 24, 2006, Georges Marciano sent an e-mail to his accountant and other long-term employees. This e-mail read in part, “Vanderbilt once telegraphed to some double crossing partners: ‘Gentlemen you have undertaken to cheat me. I will not sue you, for the law takes too long. I will ruin you.’ He did.” He was accusing his team of stealing $1.4 million from his accounts. In the end, the accused became the aggressors, and his strategy of ruin went terribly wrong.

While Cornelius Vanderbilt did in fact force the targeted gentelmen out of business within 2 years by running a competing business, Marciano’s case backfired with six California state court judgments against him—not those who he had accused of cheating him, with judgments quoted as high as a total of $370 million ($74 million) to each employee, due to Marciano’s defamation of these employees after their termination.

"I do believe it's tragic," said R. Rex Parris, an attorney who represented some of the employees who won libel judgments against Marciano. "He surrounded himself by people who wouldn't tell him that he was being a jerk, and as sufficient time went by, he started to become disconnected from the world."

Rags to Riches in the Rags Business

There is something uniquely American about the rags-to-riches-to-rags trope. For those who might not have heard the tale, Marciano and his three brothers started Guess Inc. in Los Angeles in 1981 after arriving from France, where they had grown up in poverty. Georges dropped out of school at 15 and quickly gravitated toward the garment industry. His design of skintight jeans, zippered at the cuffs and softened by repeated washings with pumice stone, launched the brand. The Los Angeles County Museum of Art named him California's Designer of the Year in 1987. His success allowed him wealth that he flaunted, with two houses on Beverly Hills’ famed Sunset Boulevard, a Boeing 737, an art collection with works by Marc Chagall and Ed Ruscha, the cellar of priceless wines, and homes in Utah and France.

The Accusations that Backfired.

But the spin of the underdog accountants fighting back at the tyrannical boss yarn can’t be beat.

You see, while Marciano can lay claim to the classic American success story — a poor immigrant who amassed a fortune through hard work and business savvy, it is the almost unimaginable legal judgment given to those employees who were smeared and fired (actually I guess it was fired and smeared) that makes for good story. He claimed they stole from him, but despite law enforcement agencies who found not a cent missing, Marciano reportedly could not be dissuaded from persisting in what he calls "a crusade" to prove the allegations. He sued the employees, who then sued him for accusing them. You see, the underdogs—the accused, fought back and became the accusers, and won. Big time.

After the verdicts in 2009, the employees moved to seize Marciano’s assets, but Marciano has been fighting through the courts ever since. The latest is that an “involuntary bankruptcy” order might be overturned, extending the fight for an undetermined amount of time.

In this oh-so-perfect-story-for-a-Jackie-Collins-novel, we personally hope for a happy ending for all—we wish the ex-employees to feel whole again, and for all, a re-set moral compass away from court battles. Because we’re not fans of schadenfreude for anyone.

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