LuLaRoe's founders have been linked to 31 LLCs set up during the last 3 years — and a lawsuit alleges they're attempting to shield assets like a Gulfstream jet, a ranch in Wyoming, and a world-record-breaking supercar named Ruthie

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• A lawsuit alleges that LuLaRoe founder and CEO Mark Stidham and a number of associates are hiding money and assets in a web of LLCs.
• Stidham and his associates are connected to at least 33 LLCs set up between 2015 and the present day, according to documents reviewed by Business Insider. Thirty-one of these LLCs are still active. 
• The majority of these LLCs also list LuLaRoe's Corona, California "hub" as a principal office.
• In its lawsuit, manufacturer Providence Industries claims a number of these LLCs are linked to assets such as a world-record-breaking car worth over $2 million and a lush ranch in rural Wyoming.
• "We believe the claims in this case are completely without merit and will fight vigorously against them," a LuLaRoe spokesperson told Business Insider in a statement.

LuLaRoe's manufacturer has filed a lawsuit against the legging empire, alleging that the company and its leaders are playing a shell game in order to avoid paying creditors. 

Providence Industries, LuLaRoe's clothing supplier, is suing its client for $49 million. The lawsuit alleges that LuLaRoe founders Mark and Deanne Stidham, along with their business associates and relatives, have transferred "substantial assets" to both themselves and their family members in order to support "lavish lifestyles" and avoid paying creditors.

The lawsuit specifically identifies 17 limited liability companies, which the plaintiff claims are used to hide assets like "exotic race cars, airplanes, warehouses, residences, and raw land."

"We believe the claims in this case are completely without merit and will fight vigorously against them," a LuLaRoe spokesperson told Business Insider in a statement. "Given this is pending litigation, we cannot comment on the specifics."

What's more, Mark Stidham submitted a sworn declaration to "address some of the patently false statements" in Providence Industries' filing. He said that the limited liability companies mentioned in Providence Industries' lawsuit were real estate and investment holding companies with "no nefarious or improper purpose."

Business Insider has reviewed documents linking LuLaRoe and its founders to 31 still-active LLCs established in the last three years. Two additional Wyoming-based LLCs  — Varldspela LLC, which was filed on April 10, 2018, and Bradham Investment Holdings, which was filed on September 18, 2017  — were both dissolved on June 18, 2018. 

Here's a look at the web of LLCs and luxurious assets surrounding LuLaRoe, its founders, and their associates:

Location is the factor that truly ties together this batch of companies.

Twenty-eight active LLCs list the address of LuLaRoe's "hub" in Corona, California as their principal address. A 2017 assessment record for the property states that its "land use" pertains to light manufacturing and it encompasses 7.42 acres.

Two other LLCs claim to share a Wyoming address with the Bronze Buffalo Club LLC, an "exclusive club" with business ties to Mark Stidham. Another LLC, of which Mark Stidham is CEO, lists a residential property in Corona as its principal office. And one LLC's principal address is listed as that of a corporate services company in Delaware.

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James Vogt, a San Diego State University lecturer and certified fraud examiner, told Business Insider that LLCs frequently serve a "very legitimate purpose" for businesses and individuals.

And Kate Andresen, a lawyer specializing in intellectual property at Nilan Johnson Lewis, told Business Insider that businesses with a franchise-based model or corporations dealing with different levels of risk across functions also tend to rely on LLCs to create a "complex business structure."

And a number of the earlier limited liability companies linked to LuLaRoe and the Stidhams appear to serve a clear business-related purpose.

LuLaRoe itself was first set up as an LLC in California in 2013. The organization was then incorporated as LLR in Wyoming in 2015, under the names of the Stidhams and LuLaRoe's chief financial officer Noall Knighton.

As far as the company's intellectual property, Lennon Leasing LLC — a Wyoming-based limited liability company formed on September 23, 2015 under Mark Stidham's name — holds the trademark on LuLaRoe's logos.

And 2000 Carolina Pines Dr. LLC reflects the address of the company's 470,000-square-foot distribution center in Blythewood, South Carolina. The State reported that the company bought the property for $16 million in April 2017.

Providence Industries alleged in its lawsuit that 17 LLCs linked to LuLaRoe and its founders were established in December 2017 alone. And according to documents reviewed by Business Insider, a total of 19 still-active LLCs with links to LuLaRoe were established in that month. 

Providence Industries claims in its lawsuit that many of these limited liability companies were established to help LuLaRoe and the Stidhams hide money and assets from creditors. The lawsuit also alleges that Providence Industries learned that its client was in "a precarious financial situation" toward the end of 2017.

And those LLCs appeared to have been established at a particularly rapid-fire pace. Four of the LLCs were filed on December 8, 2017, while three were established three days later on December 11, according to documents reviewed by Business Insider. Six were filed on December 14 of that year. Among that December crop of limited liability companies, two entities were set up in Wyoming, while the rest were created in California.

Experts told Business Insider that establishing numerous LLCs in one month could be a time-consuming process, and may be a red flag.

"When you start forming even a single limited liability company, it takes time to put all the materials together," Andresen told Business Insider. "It takes the effort of actually getting the filings put in place, and it costs money because there are filing fees associated with that."

Vogt said that he's also seen people use LLCs to hide or move around assets in situations like bankruptcy cases or contentious divorces. He said that he can't weigh in on the specific claims Providence Industries made against LuLaRoe, the Stidhams, and their associates. But he did say that the number of LLCs in this case, as well as the timing of the filings, could come across as "suspect" and could serve as a "red flag."

"It's certainly not an indictment," he said. "But if I was involved, I would definitely want to investigate further."

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Mark Stidham isn't just a casual Koenigsegg collector. He's a figure of some note among owners of the Swedish sports cars, appearing in industry documentaries and feature articles. 

And Providence Industries' lawsuit against LuLaRoe alleges that its founder is holding not one, but two of the uber-expensive vehicles under a limited liability company.

According to the filing, Stidham owns a Koenigsegg CCX worth around $700,000 and a Koenigsegg Agera RS that's valued at more than $2 million. The lawsuit also alleges that the two Koenigseggs are owned through the Ghost Squadron LLC, an active Wyoming-based limited liability company that was first established on December 13, 2016. Ghost Squadron LLC lists Mark Stidham as an organizer and lists the company's "hub" in Corona, California as the address of its principal office.

Legalinc, a corporate services company, was appointed as the company's registered agent. LuLaRoe general counsel Robert Loll is listed in documents filed with the state of Wyoming as an authorized filer for the company. Mark Stidham first used the services of Loll's law firm, Floratos, Loll, & Devine, in 2000. Loll came on as LuLaRoe's general counsel in November of 2015, according to his LinkedIn.

"Ghost Squadron" — a nickname that car lovers use to refer to a pack of Koenigseggs — is also the name of a short documentary by Car Throttle, an online community for car enthusiasts, published on August 31, 2018. The film follows Mark Stidham and a group of other Koenigsegg owners as they meet up with company founder Christian von Koenigsegg and attend the Exotics on Cannery Row auto show. 

Ironically, one of the other owners profiled in the documentary is Dan Kang, the CEO of Mydyer. Mydyer is a division of Providence Industries, the company suing LuLaRoe. Kang declined to comment for this story.

In his interview with Car Throttle, Stidham said he first bought the Koenigsegg CCX. Then he purchased the considerably more expensive Agera, which he dubbed "Ruthie."

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"Ruthie" has acquired renown of its own within the world of luxury cars. The automobile even counts celebrity and car enthusiast Jay Leno as a fan.

The reason for the car's stardom lies partly with Straight & Narrow LLC, which lists Mark Stidham as a manager. Straight & Narrow LLC was filed on July 11, 2017 in the state of Nevada, and also lists Marian Brady as a manager. Deanne Stidham's surname was previously Brady.

A few months after this still-active LLC was established, Straight & Narrow seemingly played a part in setting up an event in which Ruthie successfully set five world speed records for a production car.

Straight & Narrow LLC spokesperson Joel Oscarson told The Las Vegas Sun that the group was "planning on beating" Bugatti's production car speed record of 268 mph. The event required that an 11-mile swath of highway between Las Vegas and the unincorporated town of Pahrump, Nevada, close between 7 a.m. and 3 p.m. on November 4 and November 5.

Before Ruthie's moment of triumph, Stidham reportedly tagged along on a "sighting run" across the deserted highway with race car driver Niklas Lilja.

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SEE ALSO: LuLaRoe's CEO tearfully addresses inventory problems in leaked audio

DON'T MISS: LuLaRoe is facing mounting debt, layoffs, and an exodus of top sellers, and sources say the $2.3 billion legging empire could be imploding

SEE ALSO: LuLaRoe supplier sues for $49 million and accuses the company's founders of hiding assets in 'shell' companies