FORMER GUESS LICENSEE SEEKS TO OVERTURN ARBITRATION AWARD.(Brief Article)

LOS ANGELES -- Pour Le Bebe, the former licensee of Baby Guess and Guess Home Collections, filed a lawsuit Monday against Guess Inc., accusing the manufacturer of operating illegal franchises, and seeking to overturn a $7.7 million arbitration award.

The suit, filed in Los Angeles Superior Court, alleges that the agreements between the two companies were in fact illegal franchises, thereby nullifying the recent finding of an arbitration panel.

Pour Le Bebe plans to consolidate this lawsuit with another suit it filed in January against its own law firm, Mitchell, Silberberg & Knupp.

In the first suit, Michel Benasra, chief executive officer of Pour Le Bebe, charged his law firm with professional malpractice and breach of fiduciary duty stemming from a prolonged license termination dispute between his company and Guess.

That dispute led to the American Arbitration Association awarding Guess Inc. damages of $7.7 million in March.

According to the suit filed Monday, the petition to vacate the arbitration award is based on the violation of ethical duties and conflict of interest by Mitchell, Silberberg & Knupp for concurrently and improperly representing both Pour Le Bebe and Guess leading up to the beginning of the arbitration proceeding last year.

The suit further asserts that the arbitrators made the award based on a "series of agreements that violated California franchise laws and enforced contracts that violate public policy and are void."