Fashion queens Danielle and Vicki Vlahos in bitter court battle over loans

A $7 million feud between two cousins has exploded in the Supreme Court, with their once close relationship souring amid the fight over their fashion empire.

Two cousins who ran a $7m fashion empire are at war over personal loans totalling more than $800,000 - and how they split the company’s sale.

Danielle and Vicki Vlahos, founders of formal wear line Portia & Scarlett, faced off in the NSW Supreme Court this week after an acrimonious end to their professional and personal relationships.

The court was told the relatives “largely got along” after starting their company Love D & V XOXO in 2010 but fell out over Vicki’s desire to sell the business in early 2023.

Justice Scott Nixon this week heard evidence of the breakdown, including Danielle’s past complaints of being verbally “abused” while Vicki told the court her ex-business partner and ex-husband were now together.

“She went on a honeymoon with my ex-husband, yes,” Vicki said of Danielle during the hearing.

“I think they’re engaged … it was like a pre-honeymoon.”

Vicki (left) and Danielle Vlahos have taken each other to court. Picture: Instagram

The Vlahos cousins were known for running The Doll House and their prom and bridal wear label Portia & Scarlett, which has more than 1.9 million followers on Instagram having taken off in the US.

Former head designer Danielle is seeking in court to recover $170,000 she loaned so that Vicki could pay a divorce settlement, saying it is “common ground” this was not repaid.

Conversely, CEO Vicki alleges she is owed $645,000 by Danielle over an oral home loan agreement which the latter claims she had more than paid back already.

The court has also been asked to rule on how much the Sydney-based relatives owe on their respective company loans after a receiver was appointed and sold off business assets.

Court documents show the receiver holds about $7 million as it awaits final count on what the cousins are entitled to, or still need to reimburse the company and its associated family trust.

Under cross examination, Vicki argued she did not owe the $170,000 as Danielle had paid it via a deposit in the company’s bank account – in turn giving Danielle a “credit” against her loan balance.

The cousins at a function together in recent years. Picture: Instagram

And back in 2014. Picture: News Corp

Vicki accused the woman she said was once like a “sister” of “double dipping” by asking for the funds back.

She said that money, sent in January 2023, went toward her divorce settlement “which now Danielle has the benefit of I might add”.

Mother-of-three Vicki claims in her own lawsuit she and Danielle made an oral agreement in mid-2020 to provide a $645,000 loan to help buy a home in Gladesville.

Danielle maintains she had paid this back, to the tune of $741,903, through five separate payments and alleges Vicki had “admitted” the loan was repaid in a WhatsApp message.

“Danielle … says that she has repaid it by directly paying money to Vicki, by paying money to the Company that resulted in a corresponding reduction of Vicki’s loan account with the Company,” court papers state.

The cousins founded fashion label Portia & Scarlett. Picture: portiaandscarlett.com

During the hearing Vicki was asked by barrister Sinclair Gray whether she accepted there was bullying between the cousins, pointing to Danielle’s claims in text messages.

The court heard a February 2022 exchange included Danielle saying: “I wont be verbally abused anymore I’m sick of it. It’s causing me depression”.

Vicki said this was an attempt by Danielle “to verbal me” and described their tense words not as abuse but “family fighting”.

“Danielle and me had fights from when she was born,” she said. “So you can say from 1985, if you like.”

Court documents show the receiver has asked the court to rule on whether Vicki’s claims for $57,734 racked up attending trade shows and overseas trips in 2023 should be rejected.

Vicki also contends she is owed $216,345 in unpaid annual leave, claiming she did not take holiday breaks for more than six years.

Vicki Vlahos spoke about her relationship with Danielle.

Dress designer Danielle has done work for the Miss Universe pageant. Picture: LinkedIn

Danielle argued in court papers that although the cousins “did not formally discuss the idea of taking ‘annual leave’ both her and Vicki worked as and when they wished”.

Her lawyers claimed Vicki “took extended periods of time away from work, including, on at least one occasion, going on holidays with Danielle and her family”.

Vicki, in court, maintained only taking four weeks of annual leave during her time with the business despite parental duties and having undergone multiple medical procedures.

“I worked 12 hours a day, nine til eight, for most of my life,” she said. “It depends how you want to look at it.”

Vicki had also claimed $146,000 for accommodation service relating to company staff staying at her Los Angeles home for trade shows, court documents show.

She has argued that claim should be honoured as it was for legitimate business purposes.

“It was a business, a family business … where not everything was professionally done,” Vicki told the court.

The hearing before Justice Nixon continues.