UPDATE: October 12, 2018: Multiple sources are reporting that Brandon Truaxe has been removed as co-CEO of Deciem. A judge from the Ontario Superior Court granted an injunction sought by Estée Lauder to have Truaxe removed and co-CEO Nicola Kilner appointed as the sole, interim CEO. 

Dive Brief:

• Estée Lauder on Thursday went to the Ontario Superior Court of Justice to seek the ouster of beauty company Deciem's co-founder and CEO, Brandon Truaxe. A court spokesperson confirmed the case and said that court filings were only available on paper from the Toronto courthouse, but news reports and an Instagram post from Trueaxe himself revealing communication from Estée Lauder’s attorneys noted that the company is seeking an injunction against his further involvement. 

• Estée Lauder, which invested in Deciem in June 2017, confirmed an action in an email to Retail Dive, but gave no details. "We can confirm that we have commenced legal action in this matter," a spokesperson wrote. "We cannot comment further on this pending litigation at this time." A request for comment wasn’t immediately returned by Deciem.

• In videos and social media posts this week, Truaxe said that all Deciem stores have been shuttered, and the company's e-commerce site at press time was a blank red screen.

Dive Insight:

Truaxe has been a mercurial figure from the start, and his announcement of Estée Lauder's investment reflected some unease with Deciem's association with a corporate beauty juggernaut.

In announcing its investment, Estée Lauder noted Deciem's fast growth, "vibrant following" and 10 brands, "including international cult favorite The Ordinary, an evolving collection of skin care treatments offering familiar and effective ingredients at accessible prices, and NIOD, an ingredients-driven skincare brand focused on addressing the root causes of aging." Terms of the investment were not disclosed, according to that press release. 

For his part, Truaxe said in a blog post at the time that his company was in need of financial support. "We knew that a partnership with a strategic conglomerate would lead to questions - questions about our values and whether or not they would change; questions about our practices and policies on animal testing, product pricing, formulations and our integrity; and, perhaps most importantly, questions about our soul and whether or not it will survive such a transaction," he wrote at the time. 

In that post, he also expressed confidence in Estée Lauder, saying the beauty giant "has embraced everything about us" but emphasizing that they have a minority position, don't control Deciem's decisions, "and I continue to remain CEO (and there is documentation in place to make it nearly impossible to fire me). We will not change."

Estée Lauder appears to indeed desire change, however, after Truaxe's recent meandering claims. Those include his assertion that "almost everyone at Deciem has been involved in a major criminal activity which includes financial crimes and much other for more than 13 years," as he says in part in a video posted to Instagram. "You have no idea what a soldier I've been."

But Truaxe's unpredictability should not be much of a surprise to Estée Lauder, according to Eddie Yoon, founder of think tank and advisory firm EDDIEWOULDGROW.

"The situation between Deciem and Estee Lauder is challenging for sure, but should not be at all surprising for a few reasons," he told Retail Dive in an email. "First, it was obvious at the start Brandon Truaxe is a disruptive force. His inspiration for founding Deciem was his observation of the beauty industry's massive margins, which prompted him to create brands with much more affordable pricing."

That kind of disruptive attitude is common among successful entrepreneurs like Steve Jobs, Elon Musk and Truaxe, he also said. "It was inevitable that a large company like Estee Lauder who acquire these disruptive, unpredictable and successful companies/entrepreneurs would clash," Yoon said. "Large companies are beholden to Wall Street, who demand growth but prioritize stability above all. These companies want the growth from disruptive entrepreneurs, but can't digest the volatility that it comes with. Usually a large company that acquires a high growth upstart needs to leave it alone for the marriage to work."