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Kenny Brady Scammer and Dishonest Deposition (FULL) — Transcript

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0:04we are going
0:06on record
0:08the time is 9
0:1044 am
0:12the date is february 25th
0:142020 this is the video deposition of
0:18kenny
0:19brady
0:20volume 1
0:22taken on behalf of defendants
0:25in the matter of state of washington
0:28versus llr inc
0:31in the state of washington
0:33king county superior court
0:36case number one nine
0:39two zero two
0:41three two five two
0:43s e 8
0:45this deposition will be held at
0:485220
0:49campus drive
0:51newport beach california
0:5392660
0:57my name is kirill davidoff from view
1:00reporting
1:01real-time reporting
1:03this office is located at one three two
1:06five
1:07fourth avenue
1:08seattle washington nine eight one zero
1:11one
1:12phone number two zero six two eight
1:15seven
1:16nine zero six six
1:18the quarter porter is john brown
1:21this is the start of volume one disc one
1:25council
1:26if you would introduce yourself in this
1:28state
1:29you're affiliated please
1:31i could if i could make one quick
1:32correction i think you might have said
1:34that this has been taken out of
1:36defendants it's actually going to happen
1:38in the state of washington
1:40yes um and for appearances um
1:42tiffany lee for the state of washington
1:44i'm joined by my colleague joe canada
1:47here
1:48in the deposition and by brina bruce on
1:50the phone
1:52john scolnick for mr brady and for
1:54defendants
1:57william floradis for the same
2:02uh would the reporter please swear in
2:04the witness
2:06would you raise your right hand please
2:08you do solemnly stayed under penalty of
2:10perjury that the evidence you shall give
2:12in this matter will be the truth the
2:13whole truth and nothing but the truth
2:15yes
2:16thank you
2:17um can you state and spell your name for
2:19the record
2:22kenneth brady
2:24k-e-n-n-e-t-h
2:26b-r-e-d-y
2:28have you been deposed before never
2:31um so i just want to
2:32uh
2:33let you know about what we'll be doing
2:35here today
2:36the first thing is that our court
2:38reporter here will be typing down
2:40everything
2:41we say and so it's really important that
2:44we let each other finish and not talk
2:46over each other
2:48also because she is typing down
2:49everything
2:50um it's important that you give verbal
2:52answers so you know head nods gestures
2:56etc um she's not going to be able to get
2:58down
2:59um
3:00so you understand that you are under
3:02oath
3:03here today and that you will tell the
3:04truth
3:06yes okay
3:07um and if you need a break today you can
3:10ask for one um but my only request that
3:12if there's a question pending that you
3:14um
3:15you finished answering that question
3:17before you ask for the break
3:19is there any reason today that you
3:21cannot testify fully and truthfully no
3:25how did you prepare for this deposition
3:29i
3:31got notice of the deposition
3:33and i met with
3:35my counsel
3:37which council did you meet with i met
3:39with
3:40both john and bill did you meet with
3:42anyone else
3:44no okay
3:45um how long was the meeting
3:49three hours
3:51uh did you look at any documents
3:53i did
3:54what documents did you look at i can't
3:56recall
3:57did you look at any videos
3:59no okay
4:01um
4:02after receiving your deposition notice
4:04did you discuss your deposition with
4:05anyone
4:06no
4:08um let's talk about your background um
4:11what's your educational background
4:15i went to elementary school
4:18i graduated high school
4:20i took a couple classes at local
4:23community colleges
4:25and that's the extent of my education
4:28what type of classes did you take
4:30i took
4:31general education
4:33and also advertising and business
4:37did you obtain any associate's degree or
4:39other degree
4:41no um what's your prior work experience
4:44before you joined the world
4:49starting one
4:50um let's
4:52start with what you did right before you
4:54joined the ground worker way backwards
4:56i owned a post-production company
4:58for
5:00about four to five years
5:03prior to that i
5:06did construction managing construction
5:09doing all things
5:10on the construction site that you can
5:12imagine whether it's daily
5:14day laboring or
5:17anything with construction
5:19for about five years
5:21during that time as well started a
5:25catering company for about a year so
5:27don't
5:27off and on
5:30prior to that i
5:33was a sales rep
5:34for a skateboard company
5:38prior to that
5:39i was a
5:42sales associate at a
5:45skateboard shop for about two years
5:49and prior from that i was on a church
5:52mission
5:54um the production company was that photo
5:56fafa
5:57correct okay and did you found it i did
6:00um
6:01[Music]
6:02what did what does that um what does
6:05vodafone offer
6:06post-production for photographers
6:09um
6:11in any of your prior roles prior to
6:13lularoe were you involved in sales
6:16yes
6:17marketing
6:18yes
6:21um when did you join lularoe
6:24i believe
6:26um
6:28sometime in 2000
6:30[Music]
6:3213 maybe
6:3413 or 14. how did that come about
6:38my parents
6:40started the company and they needed help
6:42and so i offered my help
6:45when you first joined little row what
6:47kind of roles
6:49and responsibilities did you have
6:52all types
6:54we held many hats
6:55so it would be
6:56sometimes i had to
7:00i had to take calls those calls came in
7:02sometimes i had to
7:04pick boxes and ship them sometimes we
7:07would do paperwork sometimes we would
7:08set up calls sometimes we would
7:12meet
7:15sweep the floor um
7:17you
7:18put in the internet lines for not you're
7:21not yeah for
7:22for uh
7:23the cabling
7:24uh whether it's for wi-fi or whether
7:27it's for
7:31it was the beginning of a business so we
7:33kind of
7:34tried to do as much as we could
7:37right then and there
7:39so it sounds like at the beginning of
7:40your time at lularoe you
7:43or many hats
7:45yeah yeah okay um
7:47yes at any point did you
7:50start focusing in one area of the
7:52business
7:54in particular um
7:57yeah
7:59um what part of the business was that
8:01i started focusing more in on
8:04leadership development
8:06when did you start focusing more on
8:07leadership development i can't recall
8:14did you assume any other
8:15responsibilities aside from leadership
8:17development
8:19some of the hats still be worn until
8:21other
8:23individuals were hired on
8:25to take on those roles
8:28the main focus was leadership
8:29development
8:31and so when um
8:33other folks who were hired started to
8:35take on some of those leadership
8:37development roles
8:38what role did you fall into still
8:40leadership development okay
8:42um what's your current title uh vpsls
8:47how long have you been vp of sales i
8:49can't recall
8:54how did you come about that role
9:11um
9:12they thought i'd be the best person
9:15who's they
9:16um
9:17those that were involved in the company
9:18at the time
9:20was that mark and diane
9:22yes anyone else
9:25yes
9:26who
9:26art
9:27terrell
9:30justin
9:31michael
9:34austin
9:43the folks that you just named
9:49did they serve the function of an
9:51executive team earlier on
9:53um no there wasn't an official executive
9:55team early on
9:58when did the executive team first form i
10:01can't recall were you a part of it yes
10:05what was your role on the executive team
10:07the eps sales
10:11did you have weekly meetings
10:14as much as we could
10:21um what was the role of the executive
10:23team
10:25to support our retailers
10:27in helping them have
10:29successful businesses
10:36are you still on the executive team yes
10:45what are your current responsibilities
10:47as vp of sales
10:52in what way
10:54how would you describe
10:56what your
10:57[Music]
10:59day-to-day looks like
11:03no days is the same
11:06are you in charge of managing are you
11:08still in charge of leadership management
11:11sorry leadership development yes
11:14are there any other
11:15[Music]
11:16functions that fall
11:20under your responsibilities
11:22no
11:24what do you mean when you say leadership
11:26development
11:29in what way
11:34what are you referring to when you say
11:36leadership development
11:38helping retailers
11:40be responsible for their business
11:58in your responsibilities
12:00involving leadership development
12:03do you have direct communications with
12:05independent fashion retailers you do
12:08how do you communicate with them
12:12many ways
12:13do you communicate by email
12:15yes
12:16do you communicate by phone
12:19yes
12:22do you communicate
12:23with them by text message
12:25yes
12:26uh do you ever use imessage
12:29yes so you have an iphone
12:32yes
12:33do you ever use imessage from a computer
12:36yes
12:38um do you
12:40communicate with ifrs via video
12:42conferences conferencing
12:45um
12:46what programs do you use for video
12:48conferencing
12:51zoom
12:54any others
12:56i can't recall
12:57have you ever used blue jeans
12:59yes
13:00have you ever used skype escape
13:04i can't recall okay are there any other
13:06services that you recall using for video
13:09conferencing with ivars
13:11i can't recall
13:13um do you use social media services
13:16um in your
13:18leadership development role
13:20i don't
13:21have you ever used them
13:23i have
13:24have you used facebook
13:26yes
13:27what
13:29handles have you used
13:31in your official capacity working for
13:34lularoe
13:36on facebook
13:38i can't recall
13:40have you used your own personal account
13:43yes
13:44what is the handle for that
13:49i don't know
13:54i think so
13:56um have you ever um
14:04use lularoe's official facebook account
14:06in your role at the library i don't
14:08recall
14:12have you ever used the vimeo
14:18in what way
14:19um in communicating with ivers
14:24i can't recall
14:26um have you ever used youtube in
14:28communicating with others
14:31i have not
14:36have you ever used twitter to
14:37communicate with divers no
14:41have you ever used instagram to
14:42communicate with ifrs
14:45yes
14:48um do you use instagram's direct
14:50messaging
14:51capability to communicate with ivers
14:55no
15:00um do you use periscope to communicate
15:03with ifrs oh
15:05are there any other social media
15:07services that you have used to
15:09communicate with
15:11not that i recall
15:17have you ever been asked to post
15:19something
15:20for diane
15:22on instagram or facebook
15:25yes
15:26how often
15:28have you been lost
15:32are you aware of any other
15:35employees at lularoe who have been asked
15:37to post something
15:39for mark or diane
15:40on social media
15:42i don't know
15:47let's talk about
15:49what programs you use for your
15:50day-to-day work on your computer do you
15:52use computer for work
15:55yes
15:56um do you use microsoft office
16:00for work
16:01like word excel
16:05[Music]
16:06yes do you use
16:09google suite for work
16:12for example like google docs yes
16:15do you use any
16:16file transfer sites for work
16:20like dropbox
16:22no
16:24are there any other
16:27software programs that you use for your
16:29day-to-day work
16:32yes
16:33what software programs
16:45what's that
16:49mailbox for
16:51apple
16:59salesforce
17:03for crm management
17:05yeah
17:07um
17:10our back office
17:14um
17:16domo
17:17what's jomo
17:19it's an analytic site
17:22are there any other
17:24tools you use for analytics
17:26i don't know
17:34as vp of sales
17:36is part of your responsibility to help
17:38create marketing materials
17:40yes
17:41what programs do you use to create
17:43marketing materials
17:45i don't create marketing materials who
17:47creates marketing materials at lularoe
17:48the marketing department
17:51do you have access to materials that
17:53they create yes
17:55where are they stored i don't know
18:11so let's talk about your
18:13responsibilities
18:14as vp of sales
18:16were part of your responsibilities to
18:18coach and mentor independent fashion
18:20retailers
18:22yes
18:27did you play any role in overseeing the
18:30creation of materials for the ifr
18:32program
18:36can you restate that statement
18:38can you repeat it
18:40did you play any role in overseeing the
18:42creation of materials for the ifr
18:44program
18:45i mean can you say it in a different way
18:50what about it is confusing
18:51i don't understand retailer material
19:05are there materials that ifrs
19:08receive when they participate
19:10in the ifr program they purchased what
19:13when they participate in the ifr program
19:15for example like marketing materials or
19:17training materials yes
19:21did you play any part
19:23in creating those materials
19:25yes
19:26what was your role
19:28feedback
19:31who would you provide feedback to
19:34marketing department
19:35and others that are involved
19:40have you ever been involved in
19:42maintaining back office
19:47not that i recall
19:55were you involved in creating the
19:57retailer map
20:01yes
20:03what was your goal
20:06the retailer map so you made it
20:08i
20:10tried to
20:11how did you try to
20:13try to find a program that worked best
20:16at the time when it was first recreated
20:19was the retailer not your idea
20:21no whose idea was it i can't remember
20:26what
20:27programs did you use to try to create
20:29the retail amount here
20:32today do you help maintain the regellar
20:34mouth i don't
20:36do you oversee
20:40any
20:42person or
20:43team
20:45who maintains the regional amount no
20:47who does
20:48i don't know
20:49would it be the i.t department
20:52i don't know have you ever updated the
20:53rape jail or not
20:57when
20:58at any time
21:00in
21:04at some point did that responsibility
21:06move to someone else
21:08yes who did it move to i don't
21:14remember do you have any employees
21:17whom you manage
21:19yes how many
21:30four
21:31what are their names
21:33ben christian
21:36aaron
21:37will
21:40um when you say ben are you referring to
21:42bin ward yes
21:45what is christian's last name
21:48white
21:50uh what is aaron's last name
21:52lewis
21:54what is will's last name
22:05i'm sorry
22:06my mind's blank on it okay um i'm sorry
22:09does will have a
22:10title i don't know his title what does
22:13he do
22:15internal culture
22:19what does aaron do
22:24he
22:26does leadership development
22:30he
22:32organizes
22:35our tour stops
22:36he oversees our outreach team
22:42what does christian do
22:45he also is leadership development
22:49and also
22:52works with our marketing department
22:57what does ben do
22:59he does leadership development
23:03was jordan brady ever on your team
23:06yes
23:09when did he leave your team
23:11i can't recall what did jordan do
23:13leadership development
23:18so he would have reported directly to
23:19you yes
23:30aside from jordan have there been other
23:34direct reports that you've had in the
23:36past are no longer entertained
23:38yes
23:40when
23:42um let's start in
23:452014.
23:50no one
23:512015
23:58ben ward
24:002016.
24:06uh ben ward
24:09jarrett
24:10ingram
24:13sam schultz
24:17and jordan
24:19yeah
24:20i don't know if it was that year when
24:22jordan started but maybe jordan brady
24:25um what was jared ingram's role i can't
24:28recall
24:29what was sam schulzeball i can't recall
24:36in 2017
24:38who are your direct reports
24:42ben ward
24:44christian white
24:47jordan brady
24:50and
24:51aaron lewis
24:54and will
24:56yeah i still can't remember his name
24:58that's okay
24:59i'm not testing you
25:00um why did sam schultz leave
25:03i don't know
25:05did he leave
25:07on good terms
25:11no
25:16what's your understanding of
25:18um what those terms were
25:20i really don't know
25:22but you knew they weren't good
25:25yes
25:26sorry
25:31currently
25:32do your direct reports
25:34oversee any other employees
25:37yes
25:40overall what's the size of your entire
25:42team direct reports and in direct
25:44reports
25:48so those four are direct reports
25:51and then aaron
25:54he
25:55has
25:57i think
26:00i think three people on the outreach
26:02team
26:05and then i believe he also
26:08is
26:09um
26:10his team
26:11he oversees the rewards and recognitions
26:14team
26:14[Music]
26:15i believe
26:17the consumer services team
26:21and
26:28oh
26:30onboarding team
26:32and team management
26:37what is the rewards what i'm sorry
26:40what does the rewards and recognitions
26:42team do
26:45they keep track of data
26:47of retailers that may be
26:51seeing improvements
26:54and maybe
26:56growing a team
26:58and maybe
27:00increasing their sales
27:01maybe they're just
27:04good retailers in the community giving
27:06of their time and service
27:07things that we can recognize them in a
27:09positive way
27:12um does the rewards and recognition team
27:15play any part in administering the
27:17leadership bonus program no
27:22what does the consumer services team do
27:25i don't know
27:29are they involved in responding to
27:32consumer calls for example i don't know
27:36what does the onboarding team do
27:39they onboard new retailers
27:42what does the team management team do
27:46they manage
27:49teams
27:52within the company or outside the
27:53company retailer teams
27:57is the team management team involved in
27:59administering the leadership bonus plan
28:02no
28:03what
28:04department at lularoe administers the
28:06leadership bonus plan
28:09i don't know
28:18functionally who do you report you
28:22lauren simpson
28:25how long
28:27have you reported to lauren simpson
28:39nine months
28:42prior to lauren being your uh boss
28:45who did you report you
28:47art mccracken
28:51how long was he your boss for
28:57years
29:04do you recall roughly when
29:06you first
29:07started reporting john
29:12i can't recall you can give an estimate
29:23two thousand
29:27yes
29:28maybe
29:29was art your first boss at lularoe
29:34no
29:34who was your first boss at little round
29:38we never really had a boss
29:40because we held many hats and so
29:44kind of just
29:45fulfilled the needs as it came up
29:49at some point did lularoe implement a
29:51more formal management structure
29:55yes when was that
29:57i can't recall
30:01let's go back to the rewards and
30:02recognition team
30:04for a second
30:06what types of data does the rewards and
30:08recognition gene use
30:11sales data
30:14when you say sales data are you
30:16referring to
30:18retail sales data or wholesale sales
30:20data your retail sales data
30:24how do they measure improvement
30:27increase in retail sales
30:30per retailer
30:34has that always been the case yes
30:38has lularoe always
30:43kept track of retail sales to end
30:45consumers
30:48as long as we had the technology
30:50to track it when did lularoe first adopt
30:53the technology to track retail sales to
30:55end consumers
31:01i can't recall the exact date
31:27why did
31:28lauren become
31:29your boss
31:58to fulfill a vacancy at the executive
32:01level the c-suite executive level
32:06had someone filled lauren's
32:10vacancy previously or was it a new
32:15position that was created there was
32:17always a vacancy
32:22before
32:25lauren simpson
32:27filled
32:28the vacancy at the executive level that
32:31we just discussed
32:33who performed
32:36the function that he currently performs
32:37now
32:40me and justin
32:44so what was art's role
32:48as your boss
32:51healed many hats
32:54so i don't know his specific roles
32:59but he did not
33:02fill the hat that lauren currently feels
33:05no
33:08is justin lyon or pure
33:10yes what's his
33:12title
33:15i don't know his official title
33:17what does he do
33:20in the marketing department
33:28who made the decision
33:30um to fill the vacancy that lauren
33:32simpson now fills
33:35i don't know
33:36would that even work
33:38i don't know
33:41were you given an explanation as to why
33:46lauren was put in that position
33:48yes what was the explanation
33:56to continue to support
33:58our retailers
34:03who gave you that
34:04explanation mark stidham
34:11were you surprised
34:12no
34:15why not
34:22because i don't have ego
34:25fair enough
34:29are you a member of the sales executive
34:31team
34:36no okay so that that phrase is not used
34:39at the laurel
34:42no
34:43sorry
34:52in general what responsibilities did the
34:56executive team have at lularoe
34:58i don't know
34:59you were on it right
35:01yes
35:24okay sorry oh they're tapping yeah oh
35:27sorry don't tap
35:34louder
35:35okay
35:36i can do that
35:40i'm marking exhibit
35:42203
35:45which the court reporter will hand you
35:51thank you
36:07did you ever help plan the agenda
36:10for the executive team meetings
36:16yes
36:18who else was involved in helping to plan
36:20the agenda for executive team meetings
36:23art
36:30in 2015
36:32typically who would attend the executive
36:34meetings
36:42i can't recall
36:50who would run the meetings
36:52i can't recall did you ever run an
36:55executive team meeting yes
37:00how many did you run i can't recall
37:02more than 10.
37:04i can't recall
37:06can you give me an estimate
37:08i can't recall there's too many to
37:10remember
37:11i i wouldn't take that inference
37:14away from that he said he can't recall
37:16didn't say it's too many to remember
37:20you might ask another question or is
37:22that is that the question you want
37:23that's the question i want to ask what's
37:25the question the question is did you is
37:27the reason you can't remember is that um
37:30you ran too many executive team meetings
37:32for you to remember the exact number
37:34no
37:48so if you look at the document that the
37:50court reporter just handed you
37:55the email appears to
37:58be an email from you to justin lyon
38:01asking him to add agenda items to the
38:04executive meeting agenda is that right
38:08let me read it
38:45oh
39:05so
39:16okay
39:33so
40:06just thinking about this
40:15can you repeat the question
40:17um
40:18john can you repeat the question
40:22so if you look at the document that the
40:24court reporter just handed you the email
40:26appears to be an email from you to
40:28justin lyon asking him to add agenda
40:31items to the executive meeting agenda is
40:33that right yes
40:37do you know what bonus checks in email
40:39means
40:44i can't recall
40:55so these agenda items
40:57um in the email recap training bonus
40:59checks and email do you see that list
41:03yeah i see it says did you draft those
41:07topics
41:10i would assume so it's my email and it's
41:13yeah
41:14um
41:15if you look where it says audrey better
41:16report
41:17genealogy with monthly numbers entire
41:20team search
41:21do you know what genealogy with
41:24monthly numbers is
41:26i can't recall
41:28did you recall raising concerns to the
41:30executive team
41:31about developing
41:35certain functions
41:37i can't recall
41:42have you heard the term
41:44effective duplication
41:48until now
41:50not until now
41:58in your time at lularoe
42:02do you ever recall did you ever discuss
42:05effective
42:06duplication
42:08with others
42:09he just said he's never heard of it
42:10until now
42:12so what is there to ask let me rephrase
42:15um
42:19have you heard of the concept of
42:20leadership duplication or leadership
42:22replication
42:24i don't
42:27so you don't ever recall discussing that
42:28concept with anyone don't recall
42:47it's been previously matched
42:51i just keep this
42:53uh yes please keep it in a pile um as
42:55we'll be needing them later
43:01okay perfect
43:04um so i've just handed you a document
43:06that was previously marked as exhibit
43:08161.
43:20and if you look on the attachment to the
43:22document
43:24that says leadership sorry lularoe
43:26president's council web meeting
43:30okay
43:32um towards the bottom of a page there's
43:34a paragraph that starts with the number
43:35two corporate initiatives
43:37okay and then there's a bully point
43:39bullet point that says fishbowl
43:40collaboration and then how's your name
43:43does that refer to you
43:45yes
43:54uh a couple lines down from that it says
43:56main benefit to the field
43:58less errors in shipping
44:00demographic pick packs do you know what
44:02demographic pick packs are i don't
44:05no
44:13the last bolt says compensation plan
44:15testing
44:16what's compensation testing
44:18i don't recall
44:22in 2014
44:25was there an executive
44:27leadership team
44:34what do you mean leadership team
44:39sorry let me rephrase in 2014 was there
44:42an executive team at lularoe
44:48i can't recall
44:54but from this email it appears that you
44:56did attend a president's council web
44:58meeting
44:59in 2014. um what was the role of the
45:02president's council at that time
45:09the role of president's council
45:11was to better understand
45:13how we can serve
45:15our retailers
45:17the best in the best way
45:20was the president's council involved in
45:23giving
45:24lularoe feedback on
45:31how it was running its
45:34retailer program
45:38i can't recall
45:45um if you look on the next page ending
45:47in two five two four five seven zero
45:52where it says three
45:55in the second bullet
45:56communication to the field do you see
45:58that yes
46:01um and in the last line it says uh pc
46:04engagement in this process kim to assist
46:06with this does this refer to kim roy
46:08lynch
46:09i can't recall
46:11was there another kim at lularoe
46:19so looking under closing comments um
46:24do you see where it says your name kenny
46:25brady no comment
46:27i do do you recognize
46:29the names under your name on this list
46:32yes
46:33who's chelsea lawson a retailer
46:36brittany comp a retailer
46:39kelly fraught a retailer did kelly fraud
46:43ever work at lularoe yes
46:45in what capacity
46:48on boarding
46:49and
46:51answering phones
46:53does she still work at lularoe no
46:57do you know the circumstances of richard
46:59departure
47:01no
47:02and moving on to the next page who's
47:04sadie thompson
47:06retailer
47:08who's jillian ortner the retailer
47:12who's meegan parker a retailer
47:16kim roy lance a retailer
47:20and then tory
47:22messes
47:24a retailer okay
47:26did any of these individuals that we
47:28just discussed
47:29hold
47:31a role at lularoe other than retailer
47:35repeat that again
47:40did any of these individuals that we
47:42just discussed hold a role at lularoe
47:45other than
47:46retailer
47:50only kelly fought when she was not a
47:52radio killer
48:02the individuals that we just discussed
48:08are all the mentors
48:13not at this time
48:16did they achieve
48:19the mentor rank at some point
48:28yes
48:54okay
48:55i'm handing you an exhibit that has been
48:58previously marked as exhibit 164.
49:09thank you
49:17all right
49:19as long as it's not cold
49:21yeah maybe half hot and half cold
49:29um
49:32are you a recipient on this email
49:40yes
49:44who else is a recipient on this email
49:48it says
49:50johndeal
49:53dk
49:55my dire.com isn't that danny kane
49:59uh
50:00i believe so
50:02did you ever meet danny king
50:04yes
50:05who's shawn jill
50:10you know i don't know
50:15kenny brady
50:16john dale kenny brady
50:19mccracken austin stood on
50:21art mccracken awesome stidhum
50:24and if you look at the presentation
50:26that's attached to that email
50:28it says advisory board meeting november
50:3015.
50:35okay
50:36did you attend this meeting
50:43yes
50:45what do you recall about the meeting
50:52specifically just what do you remember
50:55about it
50:58i'm sorry you're gonna have to be more
51:00specific um so
51:03do you remember who attended the meeting
51:06um taylor transf
51:09mark stidham
51:11dan stidham
51:14alan ayers
51:16noel knighton
51:20myself
51:21jeff thompson
51:24jordan brady
51:26justin lyon
51:31dan king
51:40james
51:42lee
51:43who's james lee
51:45i believe it's an associate of jane of
51:48dan and then there's one other
51:51individual that's associated with dan
51:53assault with my dyer
51:58can't recall his name what was the
52:00purpose of the meeting
52:03to see how we can best serve our
52:05retailers as we're growing
52:08was it did you just did terrell give
52:09this presentation at the meeting
52:11i don't recall
52:13did anyone present at the meeting
52:23um
52:24jeff thompson
52:26what did he present
52:27i don't recall
52:32did he present on finances
52:36um i don't recall
52:42so
52:45are you for referring to
52:47changing
52:49the model as to how it was running no
52:51what were you referring to
52:53the lularoe model what's a little role
52:55model
52:56that we provide clothing
52:59the consumers would want to buy an
53:01affordable
53:03retail price
53:05that retailers can
53:07therefore
53:08sell at a retail
53:10and make money to provide for their
53:12families
53:46in your time at lularoe
53:49did anyone ever ask you for your
53:51feedback as to
53:53how to
53:59structure
54:01how
54:03wholesale merchandise was distributed to
54:05retailers
54:12oh
54:15do you know what low libero's current
54:18wholesale distribution model is
54:23yes what is it
54:25it's the same that i described earlier
54:30currently
54:32are retailers permitted to
54:35select particular prints
54:38when they order wholesale no
54:41have they ever been allowed to no
54:53who made that decision
54:56at lularoe to
54:58not permit retailers to pick their own
55:00prints it was organic
55:04what do you mean by organic
55:07organically
55:10not
55:11that wasn't a plan
55:13have you ever heard of the term scarcity
55:15model
55:17uh
55:19no
55:42so
55:55so
56:05am i done with this one uh yes
56:18i just the court reporter just handed
56:20you a document that is marked as exhibit
56:22204
56:26so earlier we discussed that you were
56:28you are on the executive team is that
56:30still the case
56:31yes
56:34um
56:35today how often are executive meetings
56:37held
56:39once a week
56:41are they held on a particular day one
56:43day
56:46what's typically
56:48discussed at executive meetings
56:50in what way
56:52sort of are there specific types of
56:53topics that are discussed like marketing
56:55finance
56:57are there routine topics that are
56:59discussed yes what are those routine
57:01topics
57:02marketing finance
57:06sales
57:10legal
57:15um
57:18positive stories of retailers
57:24production
57:28support retailers and their sales
57:35has the leadership bonus plan
57:38ever been a topic of discussion at an
57:41executive meeting yes
57:44so if you look at the document i just
57:46handed you do you play any role in
57:48product design
57:49no
57:50do you give any feedback
57:52yes
57:54um what type of feedback have you been
57:56asked for in terms of product design
57:58just view
57:59what do you mean by view just here's
58:02some product
58:04does it look good
58:05and i'll say
58:07i'm not a lady
58:09i would ask them
58:17who designs sorry who runs the product
58:20team at lularoe today
58:25michael brady
58:29does he design the product
58:31no who designs the product i don't know
58:36does lularoe have product designers
58:40yes
58:42are they their own employees i don't
58:44know
58:57um we've been going about an hour now do
58:58you want to take a short break i'm good
59:00okay i would
59:02okay he would
59:04yes we'll take a break
59:06we are going on the record at 10 34 a.m
59:17we're back on record at 10 46 a.m please
59:21continue
59:26um so kenny what was your role in
59:29forming the independent fashion retailer
59:31program
59:34explain that
59:35like earlier you said you were part of
59:38the executive team
59:41in coming up for example with the
59:43policies and
59:44procedures of
59:46the the independent fashion retailer
59:49program what was your rule did you serve
59:50as an advisor
59:52were there parts of it for example that
59:54you were in charge of
59:55coming up with and thinking about and
59:57drafting just trying to understand where
59:59broadly and what your goal is
1:00:01objection like foundation but you can
1:00:03answer
1:00:06i don't recall
1:00:08did you ever provide
1:00:10feedback
1:00:13as a member of the executive
1:00:15team
1:00:17on the policies and procedures
1:00:21of the
1:00:22ifr program
1:00:29when
1:00:30in 2014
1:00:36yes
1:00:38what about 2015
1:00:46i don't recall
1:00:482016.
1:00:52i don't recall 2017.
1:01:04yes
1:01:052018
1:01:16yes
1:01:182019
1:01:29yes
1:01:3020 20.
1:01:39no
1:01:55am i done with this
1:01:57yes
1:02:06the court reporter just handed you
1:02:09exhibit
1:02:11205
1:02:13llr-wa00023249
1:02:23the email says it's from lularoe
1:02:26but i'm going to represent to you
1:02:28that the metadata
1:02:30associated with this particular email
1:02:32lists you as the custodian which means
1:02:35it came from your files
1:02:37um
1:02:38and it's signed with your name kenny
1:02:41brady
1:02:42um
1:02:43so you mentioned kelly fro
1:02:46i'm sorry let me just interrupt you
1:02:48because you made a representation does
1:02:50it does it represent
1:02:52are you representing that this email
1:02:54came from
1:02:56his email account within the company
1:02:59um he is listed as a
1:03:01he's a custodian and then the metadata
1:03:03okay so this but it also appears from
1:03:05the signature lane that he
1:03:08drafted this email okay so so the
1:03:10metadata only shows that it came from
1:03:12that he was a custodian of the document
1:03:15okay yep all right
1:03:19sorry
1:03:21um and so at
1:03:23some point did you use
1:03:26um the email address i mean just says
1:03:28lularoe i don't recall
1:03:32um did you drop this email
1:03:35i don't recall
1:03:37is there any looking at the document is
1:03:40there any reason to doubt that you are
1:03:42the author of this email
1:03:50only that it doesn't say my name from
1:03:54it says lularoe
1:03:57is your
1:03:59signature
1:04:03you mean his
1:04:05type name and and email address
1:04:08okay
1:04:10yes
1:04:16in 2014 were you involved in
1:04:20reviewing
1:04:22the lularoe consignment program
1:04:24application and agreement
1:04:36i don't recall were you involved in
1:04:40drafting or reviewing the lularoe
1:04:41independent consultant application
1:04:43agreement
1:04:52i don't recall
1:04:57what was kelly fought role kelly fox
1:05:00role in
1:05:012014 at lularoe
1:05:13i don't recall
1:05:23why did you send these documents to
1:05:25kelly
1:05:26[Music]
1:05:31i don't recall can you look at or others
1:05:40and your role at lularoe
1:05:44did any retailer ever ask you
1:05:47to
1:05:48explain lularoe's
1:05:52policies and procedures
1:05:59i don't recall
1:06:17[Applause]
1:06:28in 2014 were you aware of the provision
1:06:30that you just read
1:06:34i don't recall
1:06:37do you recall any discussions with the
1:06:39executive team about whether
1:06:41a retailer could make an income plan
1:06:54i don't recall
1:07:23shhh
1:07:36i just expected you exhibit number 205
1:07:39bates numbered llr-wa
1:07:51is your name and email
1:07:55typed
1:07:56on the signature line of this email
1:08:00um this is the wrong exhibit this is
1:08:02206.
1:08:04oh i'm sorry
1:08:06um
1:08:10give me a second
1:08:18oh sorry i meant 206.
1:08:21um
1:08:23this is exhibit two sector eight
1:08:27was this your problem
1:08:28yeah it's the right document
1:08:36upstairs design is different
1:08:43it's the right document i think it's
1:08:44just looks like it's got more stuff i
1:08:46just took i just took it i took one of
1:08:49the things out
1:08:53who has the ability to send email
1:08:57from the account lularoe
1:09:00i don't know in 2014
1:09:03did you have the ability to send
1:09:04documents from this account
1:09:07yes
1:09:09thank you
1:09:10did anyone else have the ability in 2014
1:09:14to send documents from this email
1:09:15account
1:09:30i don't recall
1:09:34in the document marches exhibit 206
1:09:37is your
1:09:39name
1:09:41and email address
1:09:43typed in the signature line
1:09:50yes
1:09:52do you have any reason to doubt that you
1:09:54did in fact
1:09:56send this email
1:10:00yes what are your reasons
1:10:09in the from it says lularoe
1:10:12but we just established that in 2014 you
1:10:15did have the ability to send emails from
1:10:17this account
1:10:22yes
1:10:23and
1:10:24you did just say that your name and
1:10:26email address is
1:10:28listed at the bottom of this email
1:10:34yes
1:10:36okay
1:10:42so what was your role in updating
1:10:46the lularoe consignment program
1:10:48application and agreement and the
1:10:50lularoe independent consultant program
1:10:52application agreement object locks
1:10:54foundation
1:10:56you can answer if you understand
1:11:12repeat that question
1:11:14please
1:11:18so what was your role in updating the
1:11:20lularoe consignment program application
1:11:23and agreement and the lularoe
1:11:25independent consultant program
1:11:27application agreement
1:11:37i don't
1:11:38recall did you play everyone
1:11:50i don't recall
1:11:59so
1:12:17wow
1:12:22earlier you testified that one of the
1:12:25programs that you used at work was back
1:12:26office is that right
1:12:36i don't recall saying that exact term
1:12:39do you use back office at work
1:12:43no
1:12:44who uses back office out there
1:12:46i don't know
1:12:48do retailers have access to back office
1:12:57not that i know of
1:13:01so
1:13:02i just handed you exhibit 207.
1:13:08are you listed as a recipient on this
1:13:10email
1:13:13yes
1:13:14who's the email author by
1:13:18from justin lyon
1:13:23and what is justin asking you to do
1:13:26in this email
1:14:06so
1:14:18add to the back office
1:14:22did you out at the back office
1:14:34i don't recall
1:14:46in 2014
1:14:48did justin
1:14:52on occasion ask you to add things back
1:14:54office
1:15:04i can't recall
1:15:06well from the email
1:15:07you see one request kenny can you add it
1:15:09to back office that's one request right
1:15:19so it seems
1:15:21um so looking at the attachment
1:15:23where is this lularoe fashion consultant
1:15:26business overview
1:15:28you didn't draft this
1:15:30uh document did you
1:15:33i'd have to read it
1:15:35well you go ahead and take a look at it
1:17:19uh
1:18:13uh
1:18:36so
1:19:10um
1:19:55repeat the question
1:19:59why don't you go ahead and take a look
1:20:01at it
1:20:03question before that so looking at the
1:20:05attachment where it says lularoe fashion
1:20:07consultant business overview you didn't
1:20:10draft this document did you
1:20:14no who would have dropped it
1:20:20i don't recall
1:20:22but it was sent to you by
1:20:24justin lane is that correct
1:20:37in general does back office make
1:20:39available to ifr's
1:20:42training materials
1:20:44i don't know
1:20:47as vp of sales what would you do if you
1:20:48needed to find out
1:20:51find out what find out whether
1:20:56backoffice has materials
1:20:58available to ifrs
1:21:01i don't use back office
1:21:03who uses back office
1:21:05i don't know if you were to wanted to
1:21:07find out as vp of sales who use back
1:21:09office who uses backoffice what would
1:21:12you need to do to find out i don't know
1:21:16who's ashley farrow
1:21:25a retailer
1:21:29is she a leader
1:21:33what do you mean like has she ever
1:21:35achieved trainer coach or mentor status
1:21:46yes
1:21:47what rank did she achieve
1:21:57trainer
1:21:59and coach
1:22:03is she still active with the liver
1:22:10yes
1:22:13so i'm done with that document
1:22:34so i just handed you exhibit 208
1:22:37wa0028087
1:22:47so in this email ashley writes you hi
1:22:50kenny i have heard a mixed
1:22:52interpretation of the leadership
1:22:53compensation plan
1:22:55and looking for confirmation
1:22:58and then poses some questions do you see
1:22:59that
1:23:01yes
1:23:07so going back to my earlier questions as
1:23:09vp of sales did ifrs ever approach you
1:23:12with questions regarding the leadership
1:23:14bonus plan
1:23:18i don't recall does this document that i
1:23:21just handed you refresh your
1:23:22recollection
1:23:35i don't recall it did you respond to
1:23:38ashley's email
1:23:49i don't recall
1:23:50in general
1:23:52as vp of sales if you received a
1:23:54question from an ifr about
1:23:57interpretation of the leadership bonus
1:23:59plan would you respond
1:24:05i don't recall
1:24:07if you wanted to
1:24:10well i'm not asking whether you recall
1:24:11i'm asking you in general today if you
1:24:14received
1:24:15a question from an ifr about
1:24:17interpretation of the leadership bonus
1:24:19plan what would you do
1:24:23what specifically
1:24:26let's use
1:24:28exhibituated
1:24:29208 as an example
1:24:32so if ifr came to you with the questions
1:24:35that ashley has posed in this email
1:24:37what would you do today
1:24:40i would refer to my brother austin
1:24:42stidham what is austin's role at lularoe
1:24:47he oversees the leadership bonus plan
1:24:52and so
1:24:53would austin then respond directly to
1:24:56the ifr or would he come back to you
1:24:57with an answer for you to respond to the
1:24:59ifr
1:25:04i don't know
1:25:07does austin ever respond
1:25:09so are you aware of any instances where
1:25:11you have referred an ifr question to
1:25:13austin he has responded directly to that
1:25:15ifr
1:25:22yes
1:25:25have there been any instances where
1:25:27an ifr has asked you a question
1:25:30and you
1:25:33have gone to austin and he has provided
1:25:35you with the answer to the ifr's
1:25:37question to communicate back to the ifr
1:25:48yes
1:25:49how long has austin overseeing
1:25:51the leadership bonus plan
1:25:54could you hear that
1:25:58how long has austin overseeing the
1:26:00leadership bonus plan thank you
1:26:11don't recall
1:26:18as vp of sales
1:26:20what would you do if you needed to find
1:26:22out the answer to that question
1:26:27i would email it to austin
1:26:33when did austin join the route
1:26:46i don't know
1:26:47did he join before you or after you
1:26:59i don't know
1:27:02in general what is the role of a leader
1:27:04within the leadership bonus program
1:27:17what leader
1:27:19when i say leader i'm referring to a
1:27:23mentor
1:27:25coach or trainer
1:27:30and what are you asking
1:27:31can you repeat the question
1:27:36in general what is the role of a leader
1:27:38within the leadership bonus program
1:27:47i don't recall a cp of sales you don't
1:27:50know the answer
1:27:57no
1:28:01do leaders have the responsibility of
1:28:03creating training materials for their
1:28:05downlines
1:28:16that's up to them
1:28:20does lularoe
1:28:21prohibit leaders from creating training
1:28:24materials for their downlines
1:28:34i don't know
1:28:35are leaders permitted to use the liberal
1:28:38logo
1:28:39on materials that they create for their
1:28:41downlines
1:28:51i don't know
1:29:05thank you
1:29:18so
1:29:29how do you pronounce the um name
1:29:32of the author of this email where is
1:29:35this from is it tori
1:29:36messick's
1:29:39macy's macy's
1:29:42and you mentioned earlier that torrey is
1:29:44a mentor is that correct
1:29:50currently
1:29:54um
1:29:56no
1:29:57what do you mean no
1:29:58don't qualify as a mentor currently
1:30:01but at some point she did achieve mentor
1:30:02status yes
1:30:05um in this email it appears that she
1:30:08is emailing
1:30:10you and others
1:30:12a graphical guide that she and her hubby
1:30:16put together
1:30:20did you receive this email
1:30:28it appears i did
1:30:31so in 2014 you were away aware that
1:30:36tori macy's had created this
1:30:41graphical guide to the lularoe
1:30:43compensation plan
1:30:44is that right
1:30:51you can look at the document if you need
1:30:52to look at the title i don't recall
1:30:58in general do you read all your emails
1:31:05no
1:31:07in 2014 did you read your emails
1:31:16tried to
1:31:18um is the email address
1:31:22email address
1:31:27yes
1:31:36in 2014 did you have any concerns
1:31:40about
1:31:45retailers creating their own training
1:31:47materials for their downlines
1:32:01i don't recall
1:32:02in 2014 did lularoe have a policy where
1:32:06retailer created materials for their
1:32:09downlines would have to be
1:32:11reviewed and approved by lularoe
1:32:18i don't recall what about 2015
1:32:23i don't recall 2016.
1:32:29don't recall 2017
1:32:36i don't recall
1:32:382018
1:32:46don't recall 2019.
1:32:54i don't recall 2020
1:33:02not that i know of
1:33:16in the time you've been at lularoe
1:33:20has lularoe ever had
1:33:23a process where
1:33:26someone at lularoe would have to review
1:33:28and approve
1:33:30materials created by
1:33:33retailers
1:33:35that would be used with other retailers
1:33:48i don't recall
1:33:56if there were such policy
1:33:58who would who at least the road today
1:34:00would know about it
1:34:11i don't know
1:34:16are you involved in planning any
1:34:19[Music]
1:34:20events or trainings for retailers
1:34:34yes
1:34:36what events and trainings are you
1:34:38involved in helping to plan
1:34:57our annual convention
1:35:02any others
1:35:10our leadership events
1:35:14any others
1:35:24our tour
1:35:26stops do you help plan any weekly calls
1:35:35yes
1:35:37have you ever helped plan
1:35:39an opportunity call
1:35:47i don't recall
1:35:50have you ever been involved with an
1:35:52opportunity call
1:36:03yes
1:36:06roughly how many
1:36:14i don't recall
1:36:23in general who at lularoe
1:36:29leaves opportunity halls
1:36:35we don't do opportunity calls
1:36:40are you saying you don't do opportunity
1:36:42calls today
1:36:50correct has the row ever done
1:36:53opportunity calls
1:37:00yes
1:37:00when did lularoe stop doing opportunity
1:37:03calls
1:37:11i don't recall
1:37:16do you know why the liver stopped doing
1:37:17opportunity calls
1:37:25i don't know
1:37:26no one ever gave you an explanation as
1:37:28to why those opportunity calls stopped
1:37:35i don't recall
1:37:37do you ever participate
1:37:39sorry
1:37:41are you involved in
1:37:45weekly update calls
1:37:50what do you mean by weekly update calls
1:37:55is there a call where
1:37:57lularoe
1:37:59gives an update to all retailers
1:38:05no
1:38:06did there used to be such a call
1:38:15yes
1:38:17what was the call called
1:38:23the weekly update call
1:38:25who planned those
1:38:28calls don't recall
1:38:31as vp of sales
1:38:34was it part of your role
1:38:37or anyone on your team's role to help
1:38:39plan weekly update calls
1:38:54you repeat that
1:38:56please as vp of sales was it part of
1:38:59your role or anyone on your team's role
1:39:02to help plan weekly update calls
1:39:06to help yes
1:39:09who are on your team helped
1:39:17i don't recall
1:39:21what's your management style
1:39:30teach them correct principles and let
1:39:32them govern themselves
1:39:34so you're not a micromanager
1:39:42no
1:39:47in general
1:39:51if someone on the executive team came to
1:39:53you with a request
1:40:00and you can delegate that request to one
1:40:02of your team members
1:40:06would you just
1:40:08ask somebody to perform it
1:40:11for you or would you follow up and sort
1:40:13of oversee how they're executing that
1:40:15task
1:40:18so it's hypothetical
1:40:20i mean trying to understand what your
1:40:21management style is
1:40:24what specifically
1:40:26so for example if
1:40:30mark came to you
1:40:32and wanted someone on your team to help
1:40:35with a train the trainer's call
1:40:39would you
1:40:41help that person
1:40:45execute that task or would you just sign
1:40:47it out
1:40:50mark who
1:40:51mark zutum
1:40:59depends on the task
1:41:02for the train the trainer's calls in
1:41:04general
1:41:09did your team members
1:41:11have to run their agendas by you before
1:41:15they ran the calls
1:41:17when
1:41:19say in 2015.
1:41:32not all the time
1:41:33what about in 2016
1:41:41the same
1:41:432017.
1:41:52the same
1:41:55what about with coaches calls
1:41:59did you require the same
1:42:02level of
1:42:10oversight
1:42:12sorry i mean i'm gonna rephrase
1:42:20were you involved
1:42:22sorry were you or anyone involved sorry
1:42:26you or anyone on your team
1:42:28involved in
1:42:32coaches goals
1:42:36when
1:42:37in 2015
1:42:44i don't recall
1:42:462016
1:42:52i don't recall 2017.
1:42:59yes
1:43:012018
1:43:09yes
1:43:15in 2017 and 2018
1:43:18who within your
1:43:22organization was involved in coaches
1:43:25calls
1:43:33i don't recall
1:43:40as vp of sales what would you do if you
1:43:41needed to find out the answer to that
1:43:43question
1:43:49like right now to find that question
1:43:51yeah
1:43:52i have no clue
1:43:55did you ever participate in a coach's
1:43:57call
1:44:02yes
1:44:04who at lularoe plans mentor schools
1:44:11when
1:44:12uh start with 2015.
1:44:17we didn't have them then
1:44:192016.
1:44:23we didn't have them 2017.
1:44:31it wasn't an official call what about
1:44:342018
1:44:37and who would what
1:44:39can you read
1:44:45lularoe plans mentors calls
1:44:51how about
1:44:522018. okay
1:44:58many individuals
1:44:59can you name some of those individuals
1:45:02ben ward
1:45:04christian white
1:45:05aaron lewis
1:45:06myself
1:45:08deanne stidham
1:45:09mark stidham art mccracken
1:45:13and so when
1:45:15someone wants to host a mentor call
1:45:18they wouldn't necessarily come to you
1:45:20for help
1:45:27not necessarily
1:45:29are you aware of instances where
1:45:31[Music]
1:45:32marx did um or deanne brady wanted to
1:45:35host a mentor call
1:45:37and went directly to somebody on your
1:45:39team
1:45:40for help
1:45:47yes
1:45:48so the requests wouldn't have
1:45:50necessarily
1:45:51had to have come
1:45:54through you if
1:45:56mark or diane wanted to help on a mentor
1:45:58school
1:46:04yes
1:46:18so you mentioned earlier that the
1:46:20marketing team is a different team
1:46:24than your team is that right
1:46:31yes just
1:46:38as vp of sales
1:46:46did you ever have to review and approve
1:46:49marketing materials
1:46:58review yes
1:47:02and so you
1:47:04did not have to approve marketing
1:47:06materials
1:47:18i was consulted with marking materials
1:47:24is there someone at lularoe
1:47:26who has the responsible of improving
1:47:28marketing materials
1:47:34when
1:47:35let's start with 2015.
1:47:39i can't recall
1:47:422016.
1:47:47i can't
1:47:48recall 2017
1:47:55justin lyon
1:47:572018
1:48:05justin lyon
1:48:152019
1:48:27you see 2018 or 19.
1:48:29uh 2018.
1:48:31justin lyon
1:48:332020
1:48:362019 part of the year justin lyon
1:48:40part of the year lauren simpson
1:48:52so today
1:48:54prior to any marketing
1:48:58materials being
1:49:00distributed
1:49:03lauren simpson would have to approve
1:49:04them
1:49:11today yeah today yes
1:49:25who's bob allender
1:49:36why are you laughing
1:49:38because i like bob
1:49:43um he
1:49:45works for lularoe
1:49:47in one capacity
1:49:58um
1:50:00events
1:50:02does he help plan
1:50:04the annual retailer conference
1:50:15yes
1:50:17and you mentioned earlier that
1:50:20in the past you have helped
1:50:22to plan and execute
1:50:24the annual retailer conference is that
1:50:26right
1:50:34yes
1:50:35have you ever helped planned
1:50:38plan specific sessions or panels
1:50:51yes
1:50:53have you ever
1:50:55hosted your own panel at a leadership
1:50:57conference
1:51:01what do you mean
1:51:03for example have you
1:51:04ever come up with a topic and then
1:51:07presented
1:51:09on a specific topic to
1:51:11a group of retailers are you asking me
1:51:13specifically me specifically you yes
1:51:15okay not that i recall okay
1:51:18um so what is your involvement
1:51:21generally
1:51:22in
1:51:25helping to plan and execute specific
1:51:28sessions
1:51:33my team
1:51:37topics
1:51:40when you see your team do you mean
1:51:42managing your team
1:51:44together as a team okay
1:51:47i never work silo
1:51:53and you mentioned topics do you mean
1:51:56that
1:51:57you and your team
1:51:59will come up with proposed topics
1:52:02proposed from retailers
1:52:04so retailers come up with topics
1:52:08is that right
1:52:10most of them yes
1:52:15do those topics have to be approved by
1:52:17someone at little room
1:52:27yes
1:52:28who at lularoe has the authority to
1:52:31approve such topics
1:52:41many
1:52:42people is one of those people yourself
1:52:49yes
1:52:52what about ben word
1:52:58would he have authority to approve
1:53:01a proposed
1:53:03topic by a retailer to present
1:53:06uh elderly relevant
1:53:09if i gave him that authority
1:53:11or delegated it to them
1:53:14who else within your organization
1:53:18has the authority to approve retail or
1:53:20proposed training topics
1:53:26if delegated
1:53:29would be ben
1:53:31anyone else christian white
1:53:34anyone else can run with
1:53:39oh us
1:53:40not delegated
1:53:42mark and dan
1:53:50you mentioned previously
1:53:53that sam schultz
1:53:55jared ingram and
1:53:58jordan brady
1:54:00were also on your team at some point is
1:54:02that right
1:54:06yes
1:54:07did you ever delegate
1:54:09the authority
1:54:11to approve retail or proposed
1:54:14topics
1:54:15for lularoe trainings
1:54:17to any of them
1:54:23i don't recall
1:54:26is it possible
1:54:33i don't recall
1:54:44in your time at lularoe
1:54:47aside
1:54:48from you
1:54:50mark and dan
1:54:54and the instances we talked about in
1:54:56which
1:54:57you occasionally delegated authority to
1:55:00specific individuals has anyone else at
1:55:02lularoe
1:55:03had the authority to approve retail or
1:55:05proposed topics for little road
1:55:07trainings
1:55:16can you repeat that long question
1:55:21in your time at lularoe
1:55:24aside from you mark and deanne and the
1:55:26instances we talked about in which you
1:55:28occasionally delegated authority to
1:55:31specific individuals has anyone else at
1:55:33lularoe have the authority to approve
1:55:37retailer proposed topics for lularoe
1:55:40trainings
1:55:45yes who
1:55:52art mccracken
1:55:54anyone else
1:56:03no
1:56:25have you ever rejected
1:56:27a retailer proposed topic for a lularoe
1:56:30training
1:56:38i don't recall
1:56:42there any topics
1:56:44today
1:56:45that would be
1:56:47not acceptable topics for retailer
1:56:49proposed training
1:56:53i don't know
1:56:57does lularoe have any written criteria
1:57:01for how to evaluate
1:57:04and approve
1:57:05a retailer proposed topic for the liver
1:57:08training
1:57:17no
1:57:23do you recall any instances where
1:57:26a retailer gave a training on the
1:57:29leadership bonus plan
1:57:40i don't recall
1:57:42so in exhibit 210
1:57:45you appear to forward a presentation
1:57:52that was created by lula bro retailers
1:57:54to bob ollander
1:57:58why would you have forwarded this
1:58:00presentation to bob
1:58:05i have to read it
1:58:54so
1:59:05so
2:00:03so
2:00:40uh
2:01:36um
2:02:08so
2:02:37so
2:03:54this
2:04:19oh
2:04:28do you mind repeating the question
2:04:33so in exhibit 210 you appear to forward
2:04:35a presentation that was created by
2:04:37lularoe retailers to bob olander
2:04:42why would you have forwarded this
2:04:43presentation to bob
2:04:45okay
2:04:56so
2:05:36is this the first time that you're
2:05:37reviewing this talking
2:05:39i don't recall this document
2:05:43in general would you have
2:05:47reviewed
2:05:48a presentation like this before you
2:05:50forwarded dodge bump
2:05:53i don't recall
2:05:55so it's possible that you just forwarded
2:05:57it without looking at it
2:06:03that's speculation
2:06:05well i'm asking you if it's possible
2:06:07that
2:06:07they have
2:06:08presentations to bob without reviewing
2:06:10them i don't recall
2:06:13as vp of sales
2:06:16i'm still reading
2:06:29what was that question
2:06:34the original question yeah
2:06:44asking you if it's possible that you may
2:06:46have forwarded presentations to bob
2:06:48without reviewing them
2:06:50so i don't recall
2:06:54listen i'll withdraw my original
2:06:55question um
2:06:57so
2:06:58in general when you received a
2:06:59presentation that was prepared by a
2:07:01retailer
2:07:03did you always review those
2:07:05presentations
2:07:07before
2:07:08you know
2:07:10before they were used to trainings i
2:07:12don't recall
2:07:15were there instances where
2:07:20you didn't
2:07:21review
2:07:23retailer retailer materials before
2:07:26you distributed them to others without
2:07:28within the room
2:07:30i don't recall
2:07:50this
2:08:13hmm
2:08:34so i just had to do exhibit
2:08:36212
2:08:38which is a printout of metadata that's
2:08:42associated with some of the exhibits
2:08:43that we looked at earlier
2:08:48and so if you look at the number where
2:08:49it says beg baits
2:08:52the number ending in two three two four
2:08:54nine
2:08:59the top three
2:09:01the top six rows correlate with
2:09:04exhibit 205
2:09:06and starting at two three three one six
2:09:09to the end of the chart that correlates
2:09:11with exhibit 206. okay
2:09:14and so earlier you know we talked about
2:09:16there was some confusion
2:09:18as to whether or not
2:09:21these emails were
2:09:23sent from your account
2:09:25and if you see in the from line
2:09:27although the name says in all capsule of
2:09:29the row
2:09:46yeah yes so at least in points of
2:09:502014
2:09:52it appears that you were
2:09:56sending
2:09:58emails from your lularoe email address
2:10:00with the name
2:10:04is that right
2:10:08i mean
2:10:09you assembled this document right
2:10:12so metadata was provided by i understand
2:10:14but you you assembled the document
2:10:16correct we extracted the metadata and
2:10:18it's printed on this document
2:10:20okay
2:10:22i'm i'm taking it that you assembled
2:10:24this document this is the way a document
2:10:26came from lularoe correct okay
2:10:29all right
2:10:30you can answer that go ahead
2:10:34i assume so
2:10:35in 2014 did anyone else
2:10:39have access to
2:10:48i don't recall
2:10:50have you ever given anyone else at
2:10:53lularoe access to
2:11:04yes
2:11:05who
2:11:18marky
2:11:20who's marky
2:11:26she was an assistant
2:11:28what's your last name
2:11:34martinez
2:11:37in 2014 was she authorized to send
2:11:39emails from your account without your
2:11:41permission
2:11:49she was an employee in
2:11:51when did she become your assistant
2:11:57she was never my assistant
2:12:02when did she first
2:12:04have the ability to potentially access
2:12:162018.
2:12:20prior to 2018 did anyone
2:12:23else have the authority to access
2:12:27your email account
2:12:30without your permission
2:12:37not that i know of
2:12:40put that into it aside
2:13:00yeah you're getting wet from the drip
2:13:02from the when you uh
2:13:05can you put the uh if it's on the other
2:13:07side i just don't want to go nice
2:13:16there's a tissue in that box yeah
2:13:30[Music]
2:13:40let's rock and roll okay
2:13:44unless you guys are like dying no no
2:13:46okay
2:13:50how about we let you call it then if you
2:13:52need to
2:13:54yeah you're going to call it you're the
2:13:55only one working here
2:13:58i just handed you exhibit 213.
2:14:10earlier i think you testified that you
2:14:14were involved advising
2:14:17on the leadership bonus plan in
2:14:242014 did you help to come up with the
2:14:27minimum requirements as sponsor trainer
2:14:30and the requirements for leadership pool
2:14:32in 2014
2:14:45no
2:14:47who came up
2:14:49with requirements
2:14:58i don't know
2:14:59were you asked to provide feedback
2:15:02on the requirements for minimum
2:15:04requirements of sponsor trainer
2:15:06or the leadership pool in 2014.
2:15:16not that i can recall
2:15:19whose email address is
2:15:29that's nicola
2:15:31is that michael brady
2:15:33nicola
2:15:34uh who is that
2:15:37she was
2:15:39our
2:15:40graphic designer
2:15:42marketing graphic designer
2:15:48so is it possible
2:15:50that you were sending her
2:15:53these requirements so that she could
2:15:55help
2:15:57design materials about the leadership
2:15:59bonus then
2:16:08i don't know
2:16:11why else would you have
2:16:12why would you have forwarded her
2:16:15miss email
2:16:17sorry why would you have sent her this
2:16:19email
2:16:20so you're saying i sent this email
2:16:22because of the lularoe there
2:16:24yeah and i think we've established um
2:16:27from the last
2:16:29document that only you had access in
2:16:322014
2:16:34to the
2:16:35lularoe
2:16:37name email address
2:16:42i i disagree with that
2:16:44that basis of the statement so who else
2:16:47would have written could have written
2:16:49this email if not you
2:16:51i don't recall
2:16:52i don't know
2:16:54do you have any basis for believing that
2:16:56you didn't write it
2:16:58i don't know
2:17:14um
2:17:15can you give me a list of all the emails
2:17:17that you've used for official lularoe
2:17:19business since you joined at lularoe
2:17:23any others
2:17:32any others
2:17:37no
2:17:42of the accounts that you just listed
2:17:44which accounts were
2:17:46personal and which accounts were shared
2:17:54it was personal
2:17:55i don't recall
2:17:57i don't recall
2:18:19um
2:18:45so
2:18:53i handed you exhibit 214 lularoe w a 0 0
2:18:580
2:18:5945 sorry 41 526
2:19:10and this email has been sent to
2:19:13markey martinez and bob allender
2:19:18you mentioned that markie martinez
2:19:20became
2:19:22your assistant at some point is that
2:19:23right
2:19:25an assistant an assistant who did she
2:19:27assist
2:19:29myself
2:19:32the leadership development team
2:19:34and art mcgrecken
2:19:36when you say leadership development team
2:19:39are you referring to the team that we
2:19:41discussed earlier that included ben
2:19:43christian
2:19:45and will yes
2:19:49nick mullen
2:19:50that's his last name
2:19:52well
2:19:52mcmullen okay just came in line
2:19:56i couldn't think of it earlier
2:19:58proud of myself good work
2:20:00oh thanks
2:20:10so in this email
2:20:15it appears to be a draft email that will
2:20:17be sent to
2:20:19community class speakers what are what
2:20:21are community classes
2:20:23i'd have to read this email
2:20:33so
2:21:03so
2:21:17community classes were
2:21:19breakout sessions at envision
2:21:21or at our
2:21:24yep says vision setting
2:21:27in the subject line
2:21:32so these would be class top books
2:21:35and so these
2:21:38youtube videos that are linked below
2:21:41are those
2:21:43materials that lularoe created
2:21:46i don't know
2:21:48and
2:21:49under presentation about the third
2:21:52bullet down bob allender's email is
2:21:56listed
2:21:58in general
2:22:00if a retailer presentation retailer
2:22:03prepared presentation came into you
2:22:09and you forwarded it to bob allender
2:22:11could that have been for
2:22:13the purpose of
2:22:16having it presented at a
2:22:19event
2:22:24yes
2:22:32and the very last topic on the second
2:22:34page ending in 41527
2:22:37it lists a youtube video
2:22:41that appears to have the title
2:22:43leadership replication
2:22:45we discussed leadership replication
2:22:48earlier um
2:22:52in general did lularoe
2:22:56train
2:22:57or make available trainings to ifrs on
2:23:00leadership replication
2:23:12i don't recall
2:23:29what was kim roy lance's involvement
2:23:32in advising on the leadership bonus plan
2:23:46i don't know
2:23:49do you recall any instances where she
2:23:51provided information
2:23:56for you or others to loop at lularoe
2:24:00to
2:24:01use in
2:24:06marketing or training materials
2:24:12can you repeat that question
2:24:16do you recall any instances where she
2:24:18provided information for you or others
2:24:20at lularoe
2:24:22to use in marketing or training
2:24:23materials
2:24:28i don't recall
2:24:49oh
2:25:04so
2:25:10i'm marking as exhibit 214
2:25:14this is 2 15. sorry 2 15.
2:25:17thank you
2:25:19llr-wa00023329
2:25:28is
2:25:32your email address
2:25:36it's a personal email address
2:25:38why would
2:25:40this email have been forwarded to your
2:25:42personal email address
2:25:54i don't recall
2:25:55did you ever forward emails from your
2:25:58work email address to your personal
2:26:00email address so that you could work at
2:26:02things
2:26:03at home for example
2:26:12i don't recall
2:26:16did you ever use
2:26:28if i did it wasn't purposeful
2:26:33if you look at the second page of the
2:26:35email
2:26:36llr wa000-23330
2:26:42there's a section that says from kim
2:26:45is that kim gordon's
2:26:49i don't know
2:26:52in 2014 are you aware of any other kim's
2:26:56who are involved in the river business
2:26:58as a retailer or as an employee
2:27:10i don't
2:27:14recall are there any other kims
2:27:18who are mentors aside from kim vrylance
2:27:32no
2:27:43who's doug rylance
2:27:54kim's husband kim roy lance's husband
2:27:58and kim roy lance is a mentor right
2:28:06yes is doug roy lance
2:28:11officially registered as an ifr or does
2:28:14he just participate as a spouse of an
2:28:16ifr in lularoe
2:28:20spouse of an ifr
2:28:23have you met drunk
2:28:33yes
2:28:42did kim or doug roy lance
2:28:46ever
2:28:47serve as an advisor to lularoe
2:28:51on the
2:28:55independent fashion retailer program
2:29:05i don't know
2:29:23i the court reporter has handed you
2:29:25exhibit 216
2:29:28llr-wa002397
2:29:31[Music]
2:29:40did you receive this email from douglas
2:29:48i don't recall
2:29:54did he ask you to send
2:29:56did you ask him to send this monthly
2:29:59compensation plan document to you
2:30:06remember the name of the tour
2:30:11i think this was one of our first stops
2:30:15nobody ever did it was our first kind of
2:30:18educational seminar
2:30:20um
2:30:22who else aside from
2:30:24you
2:30:26kim and doug
2:30:28do you recall
2:30:29attending that educational
2:30:32tour stop seminar
2:30:34couple retailers
2:30:36justin lyon
2:30:38mark and dan is there was there anyone
2:30:41else from home office who attended
2:30:45no
2:30:49and was this particular
2:30:52educational tour stop
2:30:54only for
2:30:55current
2:30:56active retailers
2:30:59or was it also for
2:31:01people who might want to become a
2:31:03retailer
2:31:06current active retailers
2:31:09aside from spouses
2:31:11of current active retailers do you
2:31:13recall
2:31:15any other non-retailers
2:31:19or non-lularoe employees attending this
2:31:22particular educational
2:31:24tour seminar
2:31:33no
2:31:36i think we're at a good breaking point
2:31:38what time is that
2:31:39it is 12 36 we're going record at 12 46
2:31:45pm
2:31:59we are back on the record at 1 26
2:32:04p.m please continue
2:32:10so earlier today we talked about your
2:32:13involvement
2:32:16in
2:32:17helping to plan some trainings for
2:32:18retailers
2:32:20um do you recall ever giving a training
2:32:22on social media
2:32:28i don't recall
2:32:37thank you
2:32:48the court reporter has
2:32:51handed you exhibit 218 llr wa
2:32:5500023084
2:33:00and if you turn to the second page
2:33:04of the email which you appeared to email
2:33:06to yourself um
2:33:11around one o'clock it says social media
2:33:13the importance of social media by kenny
2:33:16and justin
2:33:1820 minutes does this refresh your
2:33:20recollection as to whether you ever gave
2:33:23a training on social media
2:33:26no it doesn't
2:33:29do you
2:33:30know what this
2:33:32january 24 kickoff agenda is
2:33:42i don't recall
2:33:48as vp of social media sorry as vp of
2:33:52sales
2:33:55is social media
2:33:58an important aspect of marketing
2:34:02and selling the real product
2:34:05at this time i was not dps sales
2:34:07sure but today
2:34:09is that your opinion that social media
2:34:12is an important
2:34:14tool that retailers can use to market
2:34:17and distribute their product
2:34:20yes
2:34:25in january
2:34:262014
2:34:29were there others at lularoe
2:34:32who were more knowledgeable than you
2:34:34about social media
2:34:41yes who
2:34:48justin lyon
2:34:55did justin spearhead lularoe's social
2:34:58media
2:34:59strategy
2:35:06i don't know
2:35:09i don't i don't recall
2:35:11do you know who
2:35:13in the early days would have been in
2:35:15charge of developing lularoe's social
2:35:17media strategy
2:35:26uh just a lion
2:35:29and at least from it appears from this
2:35:31email that you may have
2:35:37participated in a discussion
2:35:41or training about the importance of
2:35:43social media is that right
2:35:49i don't recall
2:35:52do you have any reason to doubt that
2:35:54this
2:36:02session on the importance of social
2:36:04media actually occurred
2:36:08so
2:36:12who are the rose customers
2:36:16i don't know
2:36:19you don't know
2:36:21who the company
2:36:23typically sells wholesale
2:36:25merchandise to
2:36:28oh i mean
2:36:29retailers
2:36:31are lularoe's customers also
2:36:34and consumers who purchase
2:36:37product from
2:36:39retailers
2:36:44i'm going to reject i
2:36:46i don't
2:36:47you're asking him for his view on who
2:36:49customers are or are you asking is a
2:36:51technical term
2:36:53i'm asking from his perspective
2:36:56in his view
2:36:57whether and consumers
2:37:00are the lero's customers
2:37:03you're asking
2:37:05if end consumers are lularoe's customers
2:37:08yes
2:37:13did you ever participate
2:37:15with art
2:37:17mccracken on any calls
2:37:19to leaders
2:37:23like individual calls to leaders
2:37:25yes
2:37:27how frequently did that occur
2:37:32i don't recall
2:37:34was it a routine
2:37:38task that you did like for example on a
2:37:40weekly basis
2:37:43it's as needed basis
2:37:46when you say as needed
2:37:48what would precipitate a need
2:37:51for you and art to have a call
2:37:54with retailer
2:37:55i would have to say as a requested
2:37:58basis
2:37:59as requested by whom
2:38:04retailers
2:38:06so you and art would
2:38:08call retailers at their request
2:38:13yes
2:38:17and you know generally speaking
2:38:20what types of topics did you discuss
2:38:22with retailers on these calls
2:38:31how they can strengthen their business
2:38:34[Applause]
2:38:36did you ever address
2:38:39problematic conduct with retailers
2:38:42on these schools
2:38:53sometimes
2:38:55um what kind of behavior
2:38:58would you qualify as
2:39:00problematic that would precipitate a
2:39:02call
2:39:04i don't recall
2:39:07would for example not attending
2:39:09leadership
2:39:11be a reason to have a call with a leader
2:39:21yes
2:39:23and why was that a problem
2:39:38because they
2:39:40were taught to teach and help those
2:39:43retailers that they brought into the
2:39:44business
2:39:46to help them to succeed
2:39:48in their retail business
2:39:51and at those leadership events
2:39:53there were education
2:39:55and resources given
2:39:57that would best help them
2:40:00help those retailers
2:40:02that they are responsible
2:40:04for let's talk about the responsibility
2:40:09of leaders for a minute
2:40:11um
2:40:13lularoe has a
2:40:15leadership bonus plan right
2:40:20yes
2:40:22and as part of that leadership bonus
2:40:24plan there are certain
2:40:28are there any written requirements that
2:40:30leaders are required to abide by
2:40:41i don't know
2:40:42i don't recall
2:40:50what type of education
2:40:53and resources
2:40:57does the liberal provide to leaders
2:41:01let's say leadership principles
2:41:04what do you mean by leadership
2:41:05principles
2:41:07principles to help them serve
2:41:10help them
2:41:11[Music]
2:41:13help the retailers
2:41:14help them
2:41:17help others not themselves
2:41:20um so so when you say serve can you
2:41:23explain
2:41:24that to me a little bit more
2:41:26so when i think of
2:41:29if i'm going to serve you
2:41:31i want to get to know you better
2:41:33understand what your desires are
2:41:36what your needs are
2:41:38if i can be at any service to help you
2:41:40get
2:41:41what your desires are and what you need
2:41:43and so in little row
2:41:45if there's a retailer
2:41:47that has a desire to choose lularoe to
2:41:49be a business for some kind of reason
2:41:52as a leader
2:41:54i want to get to know that and see how i
2:41:56can assist
2:41:57in helping you
2:41:59achieve your goal
2:42:00and what you hope
2:42:02to achieve
2:42:03as you choose it
2:42:04into the row so does serving
2:42:08also involve training
2:42:11or providing guidance
2:42:13it could
2:42:16um are the what else could it involve
2:42:19aside from training and guidance
2:42:25community
2:42:26camaraderie
2:42:29support support
2:42:32anything else
2:42:36nothing that comes to mind right now
2:42:40i'm sorry
2:42:42keep moving it's okay it's a long day
2:42:45i'm good
2:42:54can you tell me what the make good
2:42:56program is
2:42:59i don't recall
2:43:01do you recall what the happiness policy
2:43:03is
2:43:08i don't recall
2:43:11did the make good program have to do
2:43:13with
2:43:17addressing defective product
2:43:22i don't recall
2:43:28you mentioned earlier that sometimes
2:43:32as vp of sales and as a member of the
2:43:35executive team
2:43:36you're asked asked for input is that
2:43:39right
2:43:42yes
2:43:57um you had mentioned earlier that
2:44:00sometimes you helped planned
2:44:02the agenda for leadership
2:44:04um
2:44:06in may 2017
2:44:10did you help plan the agenda
2:44:12for leadership
2:44:17i don't recall
2:44:25on the next page you'll see a text in
2:44:27green this is on the page ending in
2:44:29eight three six nine nine
2:44:32it appears that mark writes can you come
2:44:34to wyoming wednesday afternoon
2:44:37and return thursday
2:44:39when he first served wyoming is he
2:44:41referring to the
2:44:44ranch i don't know
2:44:48um
2:44:49and then later on in the second bubble
2:44:52he says austin and mike are already
2:44:54coming
2:44:55do you have any idea who mike is
2:45:01i don't
2:45:04um
2:45:04could austin be austin's denim
2:45:11i
2:45:13do you know of any other
2:45:15mics who work at bularo
2:45:22yes
2:45:24can you name them
2:45:27not all of them
2:45:31do you have any idea which mic this
2:45:33might be
2:45:37i don't
2:45:43so if you look at the page ending in
2:45:45eight three seven zero zero
2:45:48there's a tax chain starting below the
2:45:50date tuesday may 16 2017.
2:46:04do you see it
2:46:06it appears
2:46:10do you recall what was discussed on this
2:46:14conference call with austin
2:46:17and mark
2:46:21i do not recall
2:46:43jesus
2:46:57can you give me some more water
2:47:00no this one should be fine right now
2:47:02they haven't put any more ice in it
2:47:06thank you
2:47:25giving us two things yes i am throwing a
2:47:28monkey wrench in the process
2:47:30okay
2:47:41so i've just handed you two documents
2:47:44one is
2:47:46a document that has been previously
2:47:48marked as exhibit 20.
2:47:50and the document with the binder clip
2:47:54i am marking as exhibit 223
2:48:06if you turn to the second page
2:48:09of the exhibit
2:48:1120.
2:48:22there appears to be
2:48:24several charts
2:48:26of rankings
2:48:29of ifrs is that right
2:48:35it appears so
2:48:52in 2015
2:48:54do you know what metric was used to
2:48:56determine
2:48:58who
2:49:00was the top overall
2:49:09i don't recall
2:49:14who
2:49:15at lularoe would know
2:50:13i don't know
2:50:15um if you turn to document that i've
2:50:18merged as exhibit 223
2:50:21if you turn to the page ending in one
2:50:24two one three seven
2:50:26are you done with this
2:50:27uh
2:50:28i'm done with that one yes
2:50:35where am i going um to the sixth page
2:50:37which ends in one two one three seven
2:50:50there's three it appears that there are
2:50:52three different
2:50:54acknowledgements on this page one says
2:50:56top earners
2:50:57one says ordered most and one says top
2:51:00recruiters
2:51:02do you have any idea as to what the
2:51:04metrics are
2:51:06to determining
2:51:08who the top earner is who ordered most
2:51:12and who the top recruiters
2:51:14are
2:51:30no
2:51:34um so the email that we're looking at is
2:51:36from january 23 2015.
2:51:39the one we looked at previously in
2:51:42exhibit 20 is from june 22 2015.
2:51:46are you aware of any changes
2:51:49in the way
2:51:51lularoe determined who its top retailers
2:51:54were in that period
2:51:57no
2:52:10so
2:52:14are you done with these yeah
2:52:43i've marked it as exhibit
2:52:45224
2:52:48llr-wa00010916
2:53:01i want to look at the
2:53:03bottom email first
2:53:05dated january 26 2018 at 3 19 pm from
2:53:09christian w do you see that
2:53:13yes is christian w christian white
2:53:20yes
2:53:21and
2:53:23he reported you at this time in 2018 is
2:53:25that right
2:53:32no
2:53:33who did he report to
2:53:38ben ward
2:53:41did ben ward report to you
2:53:46yes
2:53:49and christian writes hello per kenny's
2:53:51request i plan to post this to the
2:53:54mentor page
2:54:04and then there's a message that's listed
2:54:05underneath that
2:54:17was
2:54:21do you know what the mentor page is
2:54:24the facebook page
2:54:27is it a facebook page that's run by
2:54:28lularoe
2:54:53you repeat that real quick
2:54:55please is it a facebook page that's by
2:54:58lularoe
2:55:00yes
2:55:03do you use the facebook page sorry does
2:55:06lularoe use the facebook page
2:55:09that we just mentioned to communicate
2:55:11with mentors
2:55:19to communicate some things yes what
2:55:22kinds of things
2:55:25does it use the facebook
2:55:28mentors page to communicate
2:55:31i like this message here
2:55:36and is this a message
2:55:38sorry how would you characterize
2:55:40or categorize this type of message
2:55:43is it a training message
2:55:47i would categorize as
2:55:52we are seeking their involvement and
2:55:55help
2:56:01does lularoe have
2:56:06pages similar to this mentors page
2:56:10for coaches
2:56:15yes
2:56:16um do is there a separate
2:56:19page that's similar to this mentors page
2:56:21for trainers
2:56:26yes
2:56:30is there
2:56:31a page that is similar to this mentors
2:56:34page for all retailers
2:56:40no
2:56:48so
2:56:49who's aaron lewis
2:56:53[Music]
2:56:54i established that earlier
2:56:56sorry i forgot can you remind me he's on
2:56:58my team he's on your team okay and a
2:57:00direct report
2:57:02yes
2:57:10did you ask him to run these numbers on
2:57:12coaches
2:57:15i'd have to look at these numbers
2:58:11uh
2:58:29and i already have a question pending
2:58:31but i have another question now that
2:58:33you're looking at the spreadsheet
2:58:35about what
2:58:37it means when it says active under
2:58:39customer status
2:59:10so
2:59:16repeat the first question please
2:59:21did you ask him to run these numbers on
2:59:24coaches
2:59:55it's okay if you don't remember
2:59:57i don't remember okay
2:59:59um
3:00:00hold the record
3:00:01at 2 42 pm
3:00:13back in record at 2 51 p.m please
3:00:16continue
3:00:28at some point
3:00:30around 2015 or 2016 did the liberal
3:00:32experience an increase in defective
3:00:35clothing
3:00:40i don't recall
3:00:42if lularoe had experienced an increase
3:00:45in defective clothing how would have
3:00:46that affected your job at lularoe
3:00:53calls for speculation relax foundation
3:00:57go ahead and answer if you're able yeah
3:00:59i don't i wouldn't know
3:01:01in general
3:01:02how
3:01:03as vp of sales
3:01:05how does defective clothing affect
3:01:10brand
3:01:14same rejection
3:01:18let me try again
3:01:24in your roles vp of sales
3:01:27is part of your
3:01:29role
3:01:30the branding of the little merchandise
3:01:31and creating the vulnerable brand
3:01:36no
3:01:37okay whose job at lularoe
3:01:41is it to focus on branding
3:01:46marketing
3:01:48marketing is led by justin lyon is that
3:01:50right
3:01:51currently by lauren simpson okay and so
3:01:55justin reports to lauren
3:01:58yes
3:02:01um prior to lauren joining who handled
3:02:04branding at lularoe
3:02:07justin lyon
3:02:10are you aware of anyone else who played
3:02:12a role in branding at lularoe aside from
3:02:14justin lyon and lauren simpson
3:02:20justin's team
3:02:22do you know who justin's direct reports
3:02:25are
3:02:27no
3:02:28is there anyone who worked on your team
3:02:31who also worked
3:02:32at any point on justin's team
3:02:38no
3:02:55hmm
3:03:13so
3:03:33so i want to go back to
3:03:36tracking retail
3:03:37earlier you talked about lularoe's
3:03:39capability
3:03:41of tracking
3:03:42retail sales to consumers
3:03:45and so i just want to make sure i have a
3:03:46correct understanding of when
3:03:49lularoe
3:03:51was able to
3:03:52track retail sales to consumers um so in
3:03:562013 did lularoe make any effort to
3:03:59track retail sales to consumers
3:04:02okay just so we're clear
3:04:05earlier you were saying that the
3:04:08definition of consumers was
3:04:11retailers so now you're talking about
3:04:13using end users sorry let me rephrase
3:04:15that and
3:04:17have you heard of the term permanent
3:04:19breakaway
3:04:22in the context
3:04:24of a team
3:04:28what do you mean by team
3:04:30a retail team for example
3:04:38i don't recall that term
3:04:41um what happens to
3:04:45a retailer's team
3:04:48if a leader leaves lularoe
3:04:54object calls for speculation
3:04:57pardon me last wax foundation
3:05:03do you want to ask it a different way
3:05:05do you understand the question
3:05:09you can repeat that question
3:05:12what happens to a retailer's team if a
3:05:15leader leaves lulu
3:05:19when
3:05:24um
3:05:25let's start with today
3:05:29same objection
3:05:38let's talk about the cruise for a moment
3:05:43what is the lularoe cruise
3:05:46um
3:05:48we have a cruise it's an incentive trip
3:05:51for those that
3:05:54achieve it
3:05:55how do you achieve
3:05:57the cruise
3:05:59when
3:06:00um let's start in 2014.
3:06:04i don't know if we had a cruise in 2014.
3:06:07if we did i didn't i don't recall
3:06:10your document
3:06:12if there was i wasn't on it
3:06:17what's the first cruise you remember
3:06:18attending
3:06:20actually the first cruise that i
3:06:21remember i was i was the one holding
3:06:23down the fort at the row
3:06:26my wife was pregnant
3:06:28so we couldn't go
3:06:30fair enough yeah
3:06:33so that was the one i remember
3:06:35but i believe there may have been one
3:06:37before that one was that
3:06:39was that in
3:06:402015 i'll see my son's turning five this
3:06:44year so it'd be 2015 yeah
3:06:49nope he's turning six this year so it'd
3:06:51be 2014.
3:06:53so 2014 is likely the one that you
3:06:55skipped yes
3:06:57yes
3:06:58yeah because he was born in march
3:07:00and when does the cruise typically occur
3:07:02march april
3:07:03february march april
3:07:05around that time of year wouldn't be
3:07:07good to deliver a baby on a vote
3:07:11no
3:07:11[Music]
3:07:14thank you
3:07:16what number is that
3:07:17227
3:07:19so i've just handed you exhibit
3:07:22227 llr dash wa000
3:07:27oh there it is
3:07:28two four one
3:07:45um
3:07:56so
3:08:12228.
3:08:14i'm marking exhibit 228 which is dates
3:08:18numbered llr-wa00027230
3:08:31do you know who lula wrote tina toth is
3:08:38i don't recall
3:08:47um based on the context of an email
3:08:50it appears that she may have been in ifr
3:08:52is that right
3:08:54let me read the email sure
3:09:23so
3:09:38so
3:09:48i would assume
3:09:57i want to talk for a moment about some
3:09:58of the expectations of being a mentor
3:10:02aside from the written requirements
3:10:05of achieving certain metrics
3:10:08what
3:10:09other responsibilities
3:10:12does a mentor have with regards to their
3:10:14team
3:10:20we would hope
3:10:22that they would take an interest
3:10:24in each team member
3:10:26as much as they're capable of
3:10:29as i get to know them
3:10:31as an individual
3:10:33i know why they chose little row
3:10:35in this business
3:10:36and what they want to achieve and what
3:10:38their goal is
3:10:39and in doing so
3:10:41how they can assist help support
3:10:44any way possible
3:10:46to help that retailer
3:10:47achieve those goals
3:10:50is the requirement that you
3:10:52sorry is what you just described
3:10:54also the expectation
3:10:57of
3:10:58coaches
3:11:00i would hope that that would be for
3:11:03anyone willing
3:11:04to
3:11:07that wants to have a team
3:11:09that they have an interest
3:11:11and
3:11:13their retailers
3:11:14in helping them
3:11:16in this business
3:11:18um so that hope or expectation that you
3:11:20just described it would
3:11:23you would hope that
3:11:24all leaders would
3:11:26be interested in
3:11:28that of course
3:11:40as part of that responsibility
3:11:44our leaders
3:11:46responsible for answering the questions
3:11:52that someone on their downline or team
3:11:54might have about
3:11:56the independent fashion retailer program
3:11:59if they offer it
3:12:05are leaders ever responsible for
3:12:07communicating
3:12:10official messages from lularoe to their
3:12:13downlines
3:12:17we rely on our leaders
3:12:19to be able to share information
3:12:22that would be a benefit to all retailers
3:12:25to be able to help everyone to succeed
3:12:28we don't have a middle management
3:12:30department
3:12:31and so therefore we rely on those
3:12:33leaders
3:12:34and their bonuses
3:12:36are paid for them
3:12:37to help
3:12:38their team in any way possible
3:12:41whether it's communication whether it's
3:12:44education
3:12:45whether it's an interest in them
3:12:48and somehow to help them and what they
3:12:50want to achieve
3:12:51here at lularoe
3:12:57have you heard the term getting water to
3:13:00the end of the road yes
3:13:03what does that term
3:13:04mean to you
3:13:09i think of a farmer
3:13:11i think of a farmer planting corn
3:13:15you receive corn
3:13:17there's rows and rows of corn
3:13:19in each row you have to you have to
3:13:21water every single
3:13:24stalk of corn
3:13:26and so you open
3:13:28the water gates at a certain point
3:13:31and eventually the water starts going
3:13:33down each row
3:13:35hopefully to the end of each row
3:13:38to that very last stalk
3:13:40of
3:13:40corn and in the same way
3:13:44we think of that as communication
3:13:47hoping that
3:13:48as we communicate maybe with retailers
3:13:51or leaders or whoever
3:13:54mainly leaders i would say
3:13:56in this case
3:13:58that they would therefore communicate
3:14:00those same things to the very
3:14:04down the line to each retailer to the
3:14:05very last retailer
3:14:07and therefore the concept of getting
3:14:10water to the end of the row
3:14:14are you aware of any
3:14:16instances at your time at lularoe
3:14:19in which
3:14:21messaging didn't make it from leaders
3:14:25to
3:14:27the
3:14:28end of the row i don't recall
3:14:32did you ever have concerns about
3:14:36the messages that for example mentors
3:14:38were supposed to communicate
3:14:40getting
3:14:43distorted as they were getting
3:14:44communicated
3:14:46down to
3:14:47downline retailers
3:14:49not that they recall
3:14:57has lularoe ever considered
3:15:05doing other channels of
3:15:07messaging aside from using mentors
3:15:12to communicate
3:15:13for example changes to policies
3:15:16we always have
3:15:18what kinds of
3:15:21communication methods have you used
3:15:24email
3:15:27webinar
3:15:29phone calls
3:15:33facebook group pages
3:15:37anything retail the back office
3:15:43communication places
3:15:46to get multiple channels for each
3:15:48retailer to know
3:15:49any updates changes
3:15:52communications
3:15:53daily weekly
3:15:56it doesn't just throw go through
3:15:59leaders it never does never has
3:16:50[Music]
3:16:52thank you
3:17:04so i'm marking as exhibit 229
3:17:10llr-wa
3:17:26so i want to ask you about that first
3:17:27text from lauren simpson
3:17:34when lauren
3:17:36do you know what the sales and
3:17:37leadership team is
3:17:43yes
3:17:44what is it
3:17:47it's the sales and leadership team
3:17:50are you a member of the sales and
3:17:51leadership team
3:17:54i am
3:17:55does lauren lead the sales and
3:17:57leadership team
3:18:04a part of it
3:18:08who else leads it
3:18:15i do
3:18:21take a quick break
3:18:24we're going on the record at 3 49
3:18:27pm
3:18:37back on record at 3 58 pm please
3:18:41continue
3:18:47so earlier we talked about your role in
3:18:502014
3:18:51and how it was very fluid
3:18:54and
3:18:55you did
3:18:57what you needed
3:18:58to
3:19:00help start the business
3:19:02is that right correct
3:19:05and so in 20 in 2014
3:19:10never mind
3:19:13okay
3:19:22[Applause]
3:19:27so
3:19:40why are you laughing in philadelphia
3:19:43that was one of the emails you mentioned
3:19:45right
3:19:49do you still use that email address
3:19:53not that i know of
3:19:59so i just handed you exhibit 230 llr-wa
3:20:04000-23618
3:20:15and this email mentions
3:20:20the lularoe business opportunity hall
3:20:24whose idea was it to do the lularoe
3:20:26business opportunity hall
3:20:30mark stem dan stidham
3:20:34did they occasionally ask for your help
3:20:37in helping to
3:20:39run it
3:20:41to set it up
3:20:48and according to this email in
3:20:51april 2014
3:20:53it appears that they were approximately
3:20:5715 minute calls hosted every tuesday and
3:21:00thursday at 4 pm pacific standard time
3:21:02is that correct
3:21:05what appears here yes
3:21:11do you recall
3:21:13sorry do you know if lularoe
3:21:18ever started hosting these calls
3:21:20less frequently than twice a week
3:21:26i believe so
3:21:28i don't remember when though
3:21:30don't recall when it when that happened
3:21:33but you do remember
3:21:34the calls becoming less frequent yes
3:21:37um and do you recall what the change to
3:21:40frequency was like did it go for example
3:21:42to once a week or once every other week
3:21:44yeah i don't recall okay
3:21:50as your role grew
3:21:55and the business
3:21:57grew
3:22:00did your role with respect to business
3:22:02opportunity calls change
3:22:08yes
3:22:08how did it change
3:22:12i don't recall
3:22:29okay
3:22:46you organized it
3:22:49looks good
3:22:51i think i'm moving this
3:22:54off
3:22:58so i apologize i only have one copy of
3:23:00this email so i'm just going to give it
3:23:01to you honey
3:23:03this has been previously marked
3:23:05as exhibit 31
3:23:09and it is an email from
3:23:11you
3:23:12to lindsay wheeler
3:23:19can you tell me what you are asking
3:23:22of lindsay in this email
3:23:25let me see if i can find it
3:23:34you can take a moment to review
3:23:36the exhibit once your console is done
3:23:38okay
3:24:10sorry can you repeat my question
3:24:16can you tell me what you are asking of
3:24:18lindsay in this email
3:24:23it appears to host the opportunity call
3:24:27um so it appears that you're asking her
3:24:29to host the opportunity call in 2015
3:24:34yes
3:24:38you can put that document aside
3:24:58i just handed you exhibit 231
3:25:01llr dash wa
3:25:04zero zero zero two three four
3:25:07three eight
3:25:10is jody keach
3:25:12a retailer
3:25:17yes
3:25:19and then in this email are you asking
3:25:22her
3:25:22to participate in an opportunity hall
3:25:31well it's not from me but at salutations
3:25:33says it's me
3:25:41so i don't recall
3:25:52um this email also says i attach our
3:25:55updated lularoe fashion consultant
3:25:58business overview document overview
3:26:00document for your reference
3:26:03and there's a document attached that's
3:26:05dated
3:26:07march 6 2014.
3:26:12was this a document that you typically
3:26:14circulated to
3:26:16retailers who were asked to participate
3:26:20in lularoe opportunity pulse
3:26:32i don't recall
3:26:35um prior to a retailer participating in
3:26:38an opportunity call
3:26:40um
3:26:41did you
3:26:42do anything to help them prepare for the
3:26:44opportunity called
3:26:46object blacks foundation
3:26:49i don't recall
3:26:52in general
3:26:55before you or someone on your jeans
3:26:59have someone participate in an official
3:27:02little brook hall
3:27:04purchase a lularoe call
3:27:06sorry let me let me rephrase okay
3:27:13in general
3:27:18when you or someone on your team ask
3:27:20someone
3:27:21to participate in a little call
3:27:24do you do anything to prepare them for
3:27:26that call
3:27:27objection likes foundation
3:27:32no
3:27:34so you never
3:27:36have you ever helped
3:27:37prepare someone
3:27:40for
3:27:40an official liberal call
3:27:45not that i recall
3:27:57so you mentioned earlier that
3:27:58your team handles leadership development
3:28:04does leadership development
3:28:06involve
3:28:08helping to plan calls for retailers
3:28:13no
3:28:20what does it involve
3:28:25what does what involve leadership
3:28:26development both
3:28:30it involves
3:28:32helping
3:28:33those retailers
3:28:35that have a team
3:28:38to learn how to best serve those team
3:28:40members
3:28:42at what they want to achieve in this
3:28:44business
3:28:45to get to know them to understand them
3:28:48and to support in any way possible if
3:28:51that's what that retailer would like
3:28:53from that leader
3:28:54got it so when i say leadership
3:28:55development you have a very specific
3:28:57definition
3:28:58okay thank you for clarifying um
3:29:05does your team
3:29:07help facilitate
3:29:09opportunity calls
3:29:13no
3:29:14has your team ever helped facilitate
3:29:16opportunities
3:29:20yes
3:29:23in those instances where your team in
3:29:26the past has helped facilitate
3:29:27opportunity calls
3:29:32how typically
3:29:34has your team prepared
3:29:37retailers
3:29:39who were asked to participate in those
3:29:41calls to host those calls
3:29:47you repeat that please
3:29:49in those instances where your team in
3:29:51the past has helped facilitate
3:29:53opportunity calls how typically has your
3:29:56team prepared retailers who were asked
3:29:59to participate in those calls to host
3:30:01those calls
3:30:08i don't know
3:30:12when did lularoe stop doing opportunity
3:30:14calls
3:30:20i don't recall
3:30:22but at some point they did stop
3:30:30yes has the function of an opportunity
3:30:32called been replaced by another
3:30:35type of call or video or broadcast
3:30:42no
3:31:01thank you
3:31:11i've marked exhibit 32
3:31:13[Music]
3:31:14llrwa00023496
3:31:22232.
3:31:24sorry 232.
3:31:36is hud just in line
3:31:40yes
3:31:41is that his nickname
3:31:45um he's my brother-in-law
3:31:48and so
3:31:50that is his nickname
3:31:51why do you call
3:31:52mud he was given that name long before i
3:31:56knew him and so when he first became a
3:31:59part of our family
3:32:01that was his name and
3:32:03once we found out that his name was
3:32:05justin we're like
3:32:07no your hud you don't we don't know you
3:32:09as justin someone said hey justin he's
3:32:11like what
3:32:13he has a funny story about it
3:32:16it's okay i don't need to know the story
3:32:17you don't want to
3:32:24um and it appears in this email you're
3:32:26asking
3:32:27justin to review
3:32:29an email is that right
3:32:32it appears
3:32:37are we down there
3:32:38yeah i mean i kind of want to know the
3:32:40inside joke but i'm not going to ask so
3:32:42maybe after
3:32:43off off
3:32:45the record
3:32:48and you've never had any other
3:32:50interactions with triangle capital llc
3:32:53nope
3:33:10the time
3:33:40in 2016 did you organize a call to
3:33:43action meeting in scottsdale arizona
3:33:49when
3:33:50in august of 2016.
3:33:55what meeting
3:33:57a call to action
3:33:59from mark and jam call to action
3:34:03okay
3:34:05yeah
3:34:21i've marked exhibit
3:34:232
3:34:2534.
3:34:29llrwa00014607
3:34:40does this refresh your recollection as
3:34:43to whether you in
3:34:45august 2016 helped organize a call to
3:34:48action
3:34:49meeting in scottsdale arizona
3:34:52let me read this
3:34:54sure please
3:35:48will you please
3:35:55does this refresh your recollection as
3:35:57to whether you in august 2016 help
3:36:00organized a call to action meeting in
3:36:02scottsdale arizona
3:36:05yes um what was your role in the meeting
3:36:11to send this email out
3:36:14who asked you to send that email out
3:36:18mark and diane stidham
3:36:22so they called the meeting
3:36:26yes
3:36:28why was the meeting a closed session
3:36:33i don't recall
3:36:39who from the executive team attended the
3:36:41meeting
3:36:44i don't recall
3:36:47were mentors ostrich on the meeting
3:36:52i think some
3:36:55and if you ever see her she's really
3:36:56good
3:37:03i've heard she's lost a lot of weight
3:37:05recently oh yeah
3:37:08mark
3:37:10thank you
3:37:13this was previously marked as exhibit
3:37:15101
3:37:27when did ben ward join your team
3:37:36i do not recall the exact date
3:37:38would it have been based on this email
3:37:41would it have been sometime around 2016.
3:37:44or do you think it was earlier or later
3:37:50i really don't recall
3:37:54who hired him
3:37:56i did
3:38:01what role did you hire him for
3:38:08to help retailers
3:38:10and their businesses
3:38:12did he have particular experience or
3:38:15training that made him
3:38:18an attractive candidate for your team
3:38:21yes what was that
3:38:24a lot of things
3:38:26can you describe some of them
3:38:29yes
3:38:32he comes from years
3:38:35of experience
3:38:37don't know specifically yours
3:38:40of door-to-door sales
3:38:42specifically
3:38:44of
3:38:48security systems around the us
3:38:51he's had tremendous experience in
3:38:53building
3:38:54teams of thousands of door-to-door
3:38:57salesmen
3:38:59in
3:39:00training them in leading them
3:39:02in leadership development
3:39:04in
3:39:06effective communication psychology
3:39:12and
3:39:13he was deemed a good candidate that
3:39:16would be a asset
3:39:18for our retailers to learn and to be
3:39:20guided and coached by
3:39:30how are we doing
3:39:32we're at uh six hours and ten minutes do
3:39:34you need a break no
3:39:36rock and roll power through
3:39:39joe good
3:39:41morning
3:39:45oh
3:39:46um we can take it why don't we take a
3:39:47quick break and then
3:40:02back on record at five zero two pm
3:40:05please continue
3:40:21what's university
3:40:26what are you talking about what do you
3:40:27mean university
3:40:30are you talking about like college no no
3:40:32y o u
3:40:34n i v
3:40:36e r s i h e
3:40:37university
3:40:39what are you referring to okay i think
3:40:42i'm
3:40:44quite
3:40:44i'm introduced um exhibit to
3:40:4837 lr w38 oh got it sorry 238. thank you
3:40:59three llr-w80013
3:40:59three
3:41:07and do you see that
3:41:10in the email that justin lyon
3:41:12sends
3:41:13about four lines down
3:41:17below i have attached links to some
3:41:19videos we shot last year called
3:41:21university videos
3:41:24do you know what university is
3:41:30i don't recall
3:41:32could they be training videos for ifrs
3:41:37i don't recall
3:41:41when um
3:41:43you it looks like in this email you
3:41:45emailed justin yo have you received any
3:41:48feedback from these videos yet
3:41:51do you see that
3:41:53yes
3:41:55why were you following up on these
3:41:56videos
3:41:58i don't recall
3:41:59do you know if these videos were ever
3:42:01shared with fields
3:42:04what's the field
3:42:06by field i mean retailers
3:42:09i don't recall
3:42:21as the vp of sales who would you go to
3:42:23if you needed to find out whether any of
3:42:25these videos were ever shield
3:42:28any of these videos were ever shared
3:42:30with retailers
3:42:31i don't know
3:42:33would you go to justin
3:42:39i mean he's here i could ask him
3:42:42is there a department that manages
3:42:46back office
3:42:49i don't know
3:42:53does your anyone within your
3:42:56organization manage back office
3:42:59i don't know
3:43:12so
3:43:38i'm marking as exhibit 239
3:43:40llr-wa00072081
3:43:53so
3:43:55this email in the first sentence refers
3:43:58to a top 100 zoom call
3:44:01that happened between the top 100
3:44:04sellers in lularoe and home office
3:44:06do you know what this call is
3:44:10i don't recall is this a recurring call
3:44:12that happens on a weekly
3:44:14basis no
3:44:19were you involved
3:44:21in the call
3:44:25i have to read
3:44:26this call
3:44:28do you remember anything about this call
3:44:33i'd have to read this whole transcript
3:44:36have you ever deleted
3:44:43a recording of a call
3:44:45during your time at lularoe
3:44:50not that i recall
3:45:09okay
3:45:20i just marked as exhibit 240
3:45:25zero llr-wa0 zero
3:45:27six one six zero four
3:45:43and this appears to be
3:45:46a chat log from a top 100 webinar is
3:45:49that right
3:45:53it appears to be
3:45:58i saw you looked back at the previous
3:46:00email
3:46:01um
3:46:02if you look at that email the subject is
3:46:04top 100 call
3:46:06in late summer and fall of
3:46:102018 did the liberal host top 100 calls
3:46:15i don't recall
3:46:21looking at the date of this
3:46:24email that i
3:46:26handed you to you
3:46:30do you recall anything from this
3:46:31particular call i'd have to read the
3:46:34entire transcript
3:46:45so if you look on page and the page
3:46:47entering in 61614
3:46:50it's a few pages from the end in your
3:46:52document
3:47:01we talked earlier about a comment that
3:47:12i'm marking as exhibit 241
3:47:16llr-wa0
3:47:23is jill nielsen your wife
3:47:25she is
3:47:29and it looks like in this email
3:47:33she may have been helping you with the
3:47:35holiday letter is that right
3:47:38i'd have to read this
3:47:40why don't you take a quick look at it
3:47:55okay
3:49:18so you repeat the question please
3:49:24and it looks like in this email she may
3:49:26have been helping you with the holiday
3:49:28letter is that right
3:49:30it appears though
3:49:32he hasn't shiny
3:49:40let's do it first
3:50:14so
3:50:28this one's remarked ready
3:50:54i've handed you two exhibits that have
3:50:56been previously marked as exhibits
3:50:5911 and 12.
3:51:03these are the same
3:51:10oh
3:51:13it's a continuous message yes okay got
3:51:16it
3:51:18sorry
3:51:19it's a continuous message
3:51:23um in exhibit 12
3:51:28do you know who lularoe lindsey wheeler
3:51:30is
3:51:31yes who is it
3:51:34a retailer okay is that
3:51:36the retailer lindsey wheeler
3:51:41um
3:51:46so there's multiple lindsay wheelers
3:51:50okay but
3:51:51it's a lindsay wheeler okay um
3:51:56looking at
3:51:58the picture that's posted in exhibit 11.
3:52:07do you see the picture of the two checks
3:52:10that she's posted in this instagram post
3:52:14yes
3:52:25is it against lularoe's policies to post
3:52:28pictures of checks from lularoe
3:52:36not that i know of
3:52:40and if you look at exhibit 12
3:52:44these are likes from the same post
3:52:51is the hand
3:52:54is that your instagram account
3:52:58yes
3:53:12so
3:53:28i'm handing you a document that has been
3:53:31previously marked as exhibit
3:53:33eighteen
3:53:35are you aware of the
3:53:38launch of the noir line in 2017
3:53:41yes
3:53:44do you recall any allegations
3:53:47that lularoe was unfair
3:53:50in the way it distributed
3:53:52the noir merchandise
3:53:54amongst retailers
3:53:57no
3:54:01are you aware of any allegations from
3:54:04any retailer
3:54:06that lularoe
3:54:08seemed to be
3:54:11providing certain retailers with the
3:54:14more saleable
3:54:16prints no
3:54:21as vp of sales if you were made aware
3:54:25of complaints about unfairness
3:54:28in the distribution of inventory what
3:54:30would you do
3:54:34last foundation or calls for speculation
3:54:36that's
3:54:37incomplete hypothetical
3:54:39can you repeat the question
3:54:42as vp of sales if you were made aware of
3:54:45complaints about unfairness and the
3:54:47distribution of inventory what would you
3:54:49do
3:55:10are you waiting on me to answer this oh
3:55:12yeah it was just a foreign so you can
3:55:14answer if you understand
3:55:15it again
3:55:18sorry
3:55:19first time it's okay
3:55:24as vp of sales if you were made aware of
3:55:27complaints about unfairness in the
3:55:29distribution of inventory what would you
3:55:31do
3:55:32tried to remedy it
3:55:35how
3:55:37i think i guess it depends
3:55:39it's circumstances exactly that depend
3:55:41on the circumstance which you haven't
3:55:43described for him
3:55:46so um i want to go back to
3:55:48meetings
3:55:49um did you
3:55:51attend a meeting in salt lake city
3:55:55with high level leaders in the summer of
3:55:572017.
3:56:08i may have
3:56:14i don't recall i mean
3:56:17yeah
3:56:26do you recall a meeting
3:56:28in salt lake city with high level
3:56:30leaders during the summer of 2017
3:56:33where the refund policy was discussed
3:56:36i don't recall
3:56:52what are the yellow sun and you 70 truss
3:56:56i do not know okay were you involved in
3:56:59creating the dress
3:57:01no
3:57:03are you an indirect owner of the laurel
3:57:08that's an indirect objection likes
3:57:10foundation
3:57:12you can answer a few i don't know
3:57:14are you an owner of the laurel
3:57:19no
3:57:21are you aware
3:57:22that llr inc and lularoe
3:57:25lc are owned by two trusts called the
3:57:28yellowstone and yosemite trusts no
3:57:50it's
3:58:04i'm introducing
3:58:09i've handed you
3:58:10an exhibit that has been previously
3:58:13marked as exhibit 58
3:58:29we'd ask you a question that's not
3:58:30related to this document
3:58:33other than your salary has lularoe ever
3:58:35paid transferred or loaned you money
3:58:40no
3:58:45have you received
3:58:50any payments
3:58:52transfers
3:58:54or loans
3:58:55from any of the companies on exhibit 58
3:58:59in relation
3:59:00to your work with lularoe
3:59:03i'm going to instruct you not to answer
3:59:07i'm asking him if he's received jenny
3:59:09i'm not going to allow him to answer so
3:59:11what can you please state your basis for
3:59:13knowledge answer for that sure it's an
3:59:15invasion of his privacy and it's totally
3:59:17irrelevant to this case
3:59:21uh
3:59:22just because you phrased the question in
3:59:23terms of his job
3:59:25i i'm telling you that is a ruse and i'm
3:59:28not going to let him answer it so
3:59:31if you want to file a motion on it file
3:59:33a motion on it i'm not going to let him
3:59:34answer
3:59:36what is your salary
3:59:40objection don't answer
3:59:43what's your basis for same thing there's
3:59:45no you don't have any right to his
3:59:47salary
3:59:52aside
3:59:54are you following your counsel's
3:59:56instruction not to answer the last few
3:59:57questions
3:59:58yes
4:00:02hey let's take a break i'm just going to
4:00:03look through my notes and see if there's
4:00:04anything else well they occurred at 5 36
4:00:08pm
4:00:15back in record at 5 41 p.m please
4:00:18continue
4:00:20thank you for your testimony today i
4:00:22don't have any further questions john do
4:00:23you have further questions i don't have
4:00:24any questions we're done thank you
4:00:27this concludes the deposition of uh
4:00:30kenny brady the number of media used was
4:00:33one
4:00:34going on the record the time is 5 41 pm

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