The Rise & Fallout Of Paul Frank

The Artist Formerly Known As Paul Frank

Since its inception in 1995, Paul Frank Industries has sold $100 million worth of its cute but edgy clothes and accessories. Late last year, however, it lost the allegiance of Paul Frank himself, the design savant whose quirky creations, starting with Julius the monkey, gave birth to the brand itself. As Frank and his erstwhile partners trade allegations of disrespect, disengagement, and wedding-day slights in a battle for millions of dollars, the question arises: Which Paul Frank—the man or the company—is to blame?

Once upon a time there was a boy who loved his sewing machine. And with that love, he created a monkey. One day, the boy met two wise men who said they could help him turn his monkey into a pile of gold. He accepted their offer, and they proceeded to do just that. Along the way, they introduced the monkey to a princess named Barbie and a cat named Kitty and gave the boy a Winnebago painted in psychedelic colors. But as piles of gold sometimes do, theirs got so big that the three began to fight over it, and now the boy who loved his sewing machine may lose everything. And the monkey is caught in the middle of it.

Designer Paul Frank and his creation Julius the monkey.
Photograph by Rick Loomis/Los Angeles Times.

This is no fairy tale, but the saga of designer Paul Frank, one of the most unlikely fashion successes—and teen idols—of our time. The wise men are John Oswald and Ryan Heuser, Frank’s two partners in the astonishingly successful clothing-and-accessories company Paul Frank Industries. Theirs is the story of how three friends who spent a decade nurturing one man’s hobby into a $40-million-a-year empire let resentment and hurt feelings jeopardize everything they’ve worked for.

Digging into a plate of macaroni and cheese at the Harbor House Café in the sleepy Southern California town of Huntington Beach, Frank says he knows when it all started to go wrong. “Those guys are saying Paul Frank is not a person,” says the designer, whose given name is Paul Frank Sunich. “I hear they’re all wearing T-shirts that say ‘We Are Paul Frank.’ Well, you’re Paul Frank Industries.You’re not Paul Frank. When that started to get blurred, that’s when the problems started to happen.” It’s hard to imagine mistaking anyone else for Frank, with his thinning brown hair, lantern chin, hipster sideburns, and Popeye-esque anchor tattoos on each forearm. And yet the question “Who is Paul Frank?” is at the root of everything that’s happening between him and his former partners.

John Oswald says as much when I see him the next day at the company’s offices, in Costa Mesa, where he and a few dozen others are indeed wearing “We Are Paul Frank” T-shirts. “When we look at a design, we always say to ourselves, ‘Does this look like Paul Frank?’” says Oswald. “Not the person, but the identity of the company, the feel of what we’re about and why we do things. The Paul Frank way. It’s not just one person.”

Not anymore, anyway. Depending on whom you ask, late last year Frank either quit or was forced out of the company he co-founded with Oswald, the C.E.O., and Heuser, the president. To Frank’s defenders, it’s as if Walt Disney had been separated from his eponymous empire. That’s because Frank created his own Mickey Mouse in Julius, the widemouthed monkey that adorns a substantial portion of the products sold by the company.

Lisa Kudrow

The history of fashion is riddled with examples of labels breaking with their founding designers and then wrangling over who gets the name—and the spoils. Halston, famous for designing Jacqueline Kennedy’s inaugural pillbox hat, came to regret selling his name to J. C. Penney, while Helmut Lang and Jil Sander have both grated under the knuckle of Prada. Still, this is a remarkable turn of events for the self-consciously kitschy Paul Frank Industries, which succeeded by persuading its customers that, as its slogan says, “Paul Frank is your friend.”

The recent unfriendliness is not the result of a business in disarray. Last year’s sales tally, of $40 million, was the company’s best yet. The firm is making so many products—more than 400 a season—that in 2006 it split into three separate lines. There’s Paul Frank sportswear, Small Paul (for kids), and Julius & Friends, featuring images of Julius and his eccentric supporting cast—Clancy, the world’s smallest giraffe; the perpetually nervous Worry Bear; and a raft of other characters with such names as Ellie, Skurvy, and Shaka Brah Yeti.

The company’s clothes have always been popular with the Hollywood crowd. Paul Frank products have shown up in movies from Austin Powers in Goldmember to The 40 Year-Old Virgin; on TV in CSI, The O.C., and 24; and on the backs of young stars such as Hilary Duff, Kelly Osbourne, and Jaime Pressly. Comedian Andy Dick developed a full-blown obsession with the brand, collecting its boxers, pajamas, sock puppets, T-shirts, coasters, lunchbox, and lemonade-pitcher-and-glasses set. “I love how whimsical they keep it,” he says. “There’s a certain dark edginess, but it’s friendly and comical. It’s kind of tongue-in-cheek Goth.”

The products caught on with musicians too, including Christina Aguilera, Moby, Weezer, and the White Stripes. I once asked Frank, a music fanatic, how he felt when he heard that David Bowie had visited the company’s boutique in New York City. “David Bowie shopping in my store is better than the last day of school,” he said. “Do you remember that feeling?”

And while Paul Frank Industries has seen its moment of absolute hipster heat come and go—mainstream success can do that to you—it is still scoring hits in the celebrity stratosphere. Maddox Jolie, son of Angelina and one of the most-watched children on the planet, was recently spotted wearing a Small Paul T-shirt.

Back in 1995, the closest Paul Frank Sunich got to that kind of tabloid celebrity was at his dead-end day job at a newsstand. But fate intervened that year when Frank, who still lived at home with his parents in Surf City, asked her for a Singer sewing machine for Christmas. He taught himself how to sew at night and began making wallets for friends. Some he made from scratch; others he bought, took apart, and put back together. His primary materials have remained constant since that time: a lot of vinyl, mainly Naugahyde, and vibrantly colored cotton. For inspiration, he looked not to Hermès but to Jim Henson. “It was fun to go to the Sesame Street store and get your Ernie wallet,” says Frank. “You could hang onto your childhood that way. That’s what I was trying to do.”

Ryan Heuser was the head of public relations for Mossimo’s men’s line when he befriended the interesting character who worked at his local newsstand. “We’d go shopping together, talking about why guys can’t find cool colored socks,” says Heuser. “And then one day, he made me one of his customized wallets, and I started to realize what a true talent he was. People say they have epiphanies, and I had a moment where I said to him, ‘Paul, would you like to be in business with me?’” In late 1995, Heuser put up $5,000 of his own money and set Frank up in the garage of his home, in Huntington Beach. “We got a sewing machine and some vinyl,” says Heuser. “I made some stickers and some dies, and we were on our way.” Two years later, Oswald, who happened to be dating Heuser’s roommate, overheard a company “meeting” in the house and signed on, taking the reins as C.E.O. “He saw that our business was starting to get successful, and the momentum that my designs were getting around town,” says Frank. “And he wanted to become part of it. And he had some capital—that’s what we needed.” The company racked up $200,000 in sales in 1997 and formally incorporated that December.

In those early days, the trio got a rush out of expanding their new business. Frank would churn out the designs while Heuser and Oswald took care of the rest, from sourcing production to negotiating with buyers. “We said, ‘Let’s have some fun together, and if we make a living, that’s cool,’” says Oswald, a former high-school football star who still carries himself like an athlete. “We were building trade-show booths at three in the morning out of two-by-fours and plywood so we didn’t have to pay union fees. We stayed in the same hotel room because we didn’t have enough money for another. We all worked our asses off, just three guys who had a dream together to build something cool.” Success came quickly. At the Action Sports Retailer show in Long Beach in February 1998, Oswald and Heuser took $500,000 in orders at a time when the company’s total holdings amounted to $3,000 in a checking account.

That the three were largely self-taught made their success all the more remarkable. While Heuser had spent a few years at Mossimo, he had graduated from Orange County’s Chapman University only a few years earlier, in 1994, and his first job had actually been a $6-an-hour shift in Mossimo’s warehouse. Oswald, a graduate of San Diego State, had worked on the venture-capital side of Sprint in the early 1990s, but he had zero experience in the fashion business. And while Frank did go to Orange Coast College to study art—it took him eight years to graduate—he doesn’t count a single fashion designer among his major influences, leaning more toward 20th-century modernist designers such as George Nelson and Charles and Ray Eames. “We were like the triangle offense used by the L.A. Lakers,” says Heuser. “Paul was the true creative, I was branding and sales, and John was finance and accounting.”

They had the luxury of learning on the job thanks to the instant popularity of Julius the monkey. Julius is cute, but he also reflects his creator’s devilish sense of humor—sometimes subtly, sometimes overtly. The combination of innocence and sly wit, still present in almost every product the company makes, won over teenage girls, skate rats, rock musicians, and fashionistas alike. As is fitting for a lover of macaroni and cheese, Paul Frank created designs that are the comfort food of the fashion industry.

Frank drafted Julius to play the lead role in a never-ending stream of tributes to the pop-culture icons of his youth. Colonel Julius appeared on a T-shirt wearing the same bolo and glasses as Colonel Sanders of KFC. He wore a California Highway Patrol helmet for a T-shirt that says, “CHiMPs.” Then there was the time that four faces of Julius wore the makeup of the glam-metal band Kiss. “I like to spoof, but in a respectful way,” Frank says. “But one day this call comes over the intercom from [Kiss singer] Gene Simmons. At first I thought it was a joke, but it wasn’t. He said I was stealing from him. I tried to tell him it was out of respect that I did the shirt, that I was trying to make younger kids realize how cool Kiss was. But he didn’t see it that way.”

The company carved out a lucrative niche in a casualwear market dominated by surf and skateboard brands such as Mossimo, Quiksilver, and Roxy. And Frank’s designs were so singular that a following developed around the man himself, a phenomenon his partners actively encouraged. “For a while there, it was borderline cult-like,” says Marshal Cohen, a senior industry analyst for NPD Fashionworld. “He could have sold a limited-edition Paul Frank bowling ball if he wanted to.”

The most coveted items were the result of collaborations—with Barbie, Elvis Presley Enterprises, and the Andy Warhol estate, among others. Frank even partnered on a series of T-shirts, bags, and accessories with Hello Kitty. In her 26 years, Hello Kitty, who reportedly earns $500 million annually for her parent company, Sanrio, had never felt the need to join forces with anyone, but she made an exception for Julius.

Paul Frank Industries opened its first store in August 2001, and today there are 15: 3 in Southern California, 2 in Athens, and 1 each in New York, Chicago, Las Vegas, San Francisco, Dallas, London, Amsterdam, Berlin, Bangkok, and Bahrain. A typical store, such as the one on Mulberry Street in Manhattan, sells T-shirts, pajamas, shoes, watches, clocks, wallets, handbags, surfboards, and bicycles. Oswald says the company, which has amassed $100 million in sales since 1997, hopes to have 50 to 60 stores within the decade. Paul Frank products are also sold in nearly 2,000 other retail locations worldwide, from Urban Outfitters to Nordstrom’s.

Left to his own devices, however, Frank might still be working at that newsstand today. His ambition has never been to make a fortune, just to make people smile. “That’s my goal in life,” he says. “I want people to say, ‘That damn Paul Frank. What’s he going to think of next?’” It took a partnership with the much hungrier Oswald and Heuser to bring Frank’s eccentric talent to millions of customers outside Surf City. Somewhere along the way, however, that partnership cracked into a million pieces.

In 2003, Heuser was still describing their relationship in glowing terms. “I’ve found my home,” he told me then. “I’m happy to go to work and see my friends. The bigger we get as a company, the tighter and more bonded the three of us are getting.”

But Frank says he stopped feeling comfortable at the office as early as 2000, when Oswald and Heuser sat him down and told him he would have to start coming in to work earlier. Like many artists, Frank says he’s “working” all the time, soaking up inspiration from things he sees or touches, and mulling over design concepts in his mind. Sitting behind a desk didn’t strike him as particularly useful. “That day, I realized they thought they were my bosses in some way,” says Frank. “It was weird. They shared an office, they worked out together, and they were buddies. To them I was just this esoteric artist.”

Dan Field, a band manager whose clients include Weezer and Audioslave, has been advising Frank in his severance negotiations with Oswald and Heuser. Field blames the partnership’s breakup on the age-old conflict between artists and suits. “The head of Sony doesn’t call Bob Dylan and tell him he needs to be there at nine a.m. every day,” says Field. “These guys clearly don’t understand the creative process.”

The truth, however, may not be so simple. “We understand that ‘artists’ don’t keep normal hours, and we factored that in,” Heuser responds. When Frank decided he needed a larger, off-site workspace where he could get back to actually making products, instead of merely designing them, Oswald agreed to have the company cover all costs on the 3,000-square-foot studio, even though Frank says he was prepared to pay the rent out of his own pocket. Indeed, Frank’s partners seem to have given him a wide berth. As long as he held up his end as the company’s creative director and public face, he could do as he pleased.

But Frank, who admits to being a class-A introvert, chafed at having to make public appearances. In 2003, I accompanied him to a signing at the store in Dallas, and while he seemed flattered by the huge turnout of mostly young women, some of whom had tattooed his characters on their bodies, the four-hour signing left him sapped of energy, as if he’d run a marathon.

Although each partner owned a third of the enterprise and was paid exactly the same amount ($350,000 apiece in 2005), Oswald and Heuser saw their workloads grow with the company while Frank stuck to what he knew, whether that was fiddling with sewing machines, doodling, or putting on a solo art show at a local gallery. For that, Frank is convinced that his partners came to resent him, and Oswald doesn’t exactly dispute the point. “He had the best situation ever,” Oswald says. “He didn’t have to come to the office, he got paid exactly the same as we did, and we’re the ones who did all the work. He didn’t do anything, and he still quit. What am I missing here?”

What they’re missing, says Frank, is that he was fully engaged in the design process and that from the beginning he felt treated less as a partner than a means to an end. “Comparing business hours to creative hours is silly,” Frank says. Forgetting that without his designs there would be no company, Heuser and Oswald, Frank says, engaged in a long-running campaign to “minimalize” his contributions, by overruling his design decisions or by accusing him of not doing enough in-store appearances. That attitude was typified, he says, by a remark Heuser’s father, a board member, made at a meeting last year. “He asked me, ‘So what do you do, Paul? I know what Ryan and John do. But what do you do?’ I couldn’t believe he was seriously asking me that.”

“My father is a straitlaced corporate businessman. I think the intention of his question was not meant as inflammatory, but rather was of genuine curiosity,” Heuser says. “Why would we minimize the contributions of our namesake?”

But while nobody will argue that the overall design aesthetic is still a reflection of Frank’s own, some current employees maintain there weren’t too many recent contributions. “In 1998, he was in control of everything,” says senior design director Benjamin Soto. “But he eventually stopped coming in to the office at all. It got to the point that we just did things without him.” (“I never stopped coming in,” says Frank. “I was the creative director until I was fired.”)

Soto’s design colleague Parker Jacobs is more blunt. “Everybody thinks this is like Walt Disney, the great genius, getting muscled out of his empire by some business guys,” he says. “It’s more like when that kid Jonathan Taylor Thomas left Home Improvement. I love Paul, and am eternally grateful to him. But at the end of the day, do you really think the people at Home Improvement missed Jonathan Taylor Thomas? More likely, they were like, ‘Well, that’s one less prima donna to worry about.’”

The list of complaints among the partners veers into the seemingly trivial. One: Even after Heuser hooked up a camera to Frank’s computer in his off-site space, Heuser says Frank could barely be bothered to use it to virtually attend design meetings. (Frank says he felt the camera was unnecessary.) Two: Because Frank had an avowed fear of flying, he supposedly forced his partners to buy an expensive Winnebago in which he could tour the U.S.—and then flew to Tahiti for his honeymoon. (Frank says the decision to buy the R.V. was made jointly with Oswald and Heuser, and adds, “I think they’d understand that you can’t drive to Tahiti.”) Three: On one of those bus tours, he agreed to have a film crew follow him, and then became angry when Heuser edited footage that he had already edited himself. “Do you think it’s fun to have a camera crew up your you-know-what all day?” asks Frank. “I’m out there on the road, and he’s still trying to undermine me. Come on. Can’t you have a little more respect, can’t you just pretend I’m a little more important than you think I am?”

For all the bickering about office space and Winnebagos, it took a wedding to really set the partners at odds. Last June, Frank married Susan Wang, whom he had met at a store signing in Costa Mesa’s South Coast Plaza mall. When Frank informed his partners of his engagement, Oswald reminded him that their shareholders’ agreement required him to sign a pre-nuptial contract that protected his shares of Paul Frank Industries from becoming community property in the event of a divorce. “Paul asked me to recommend an attorney, so I did, and that attorney suggested to him that he protect everything he has, and not just his shares in the company,” says Oswald, who is twice divorced.

But Frank became outraged by what he saw as Oswald’s interference in his personal life. After signing an agreement that protected only his shares of the company, Frank decided not to invite Oswald and Heuser to his wedding at Disneyland, with some 150 guests—just 20 or so from Frank’s side. The snub took Oswald and Heuser completely by surprise. “We’ve been his partners—and his friends—for 10 years,” Oswald says. “Hell, I thought we’d be in the wedding.” Some compared Wang to another woman whose mere appearance on the scene drove a wedge between two guys named John and Paul. To her detractors, she is the Yoko Ono of Costa Mesa. (Frank refused to let me speak to Wang for this story.)

Frank also replaced his assistant, Stacia Hanley, accusing her, she says, of meddling in the pre-nuptial affair. “I no longer trusted her to be my assistant,” Frank says. She wasn’t invited to the wedding, either, even though she had worked side by side with Frank for four and a half years. “I was heartbroken when I was let go, shocked that he didn’t believe in me anymore,” Hanley says.

The crisis came to a head last August, when Frank returned from his Tahitian honeymoon to discover that Heuser and Oswald had emptied out his office at the company headquarters. (They say they needed the space and figured Frank had plenty of room at his warehouse.) Frank confronted the board of directors to say that he’d had enough. Oswald and Heuser say he quit during that meeting and told them he’d rather be working at The Home Depot. Frank denies doing either; he says he merely expressed a wish to discuss being bought out of the company.

Both Oswald and Heuser cut imposing figures, with their identically shaved heads, studied casual attire, and bodies like the champion surfers on Huntington Beach. While they’re both friendly enough, Oswald in particular gives the impression that he doesn’t stand for too much bullshit. Paul Frank, by contrast, is a gentle, scattered soul who communicates less in complete sentences than in feelings and moods. It is not a group ideally suited to hashing out the details of an equitable severance agreement, and when they tried to do just that, between August and November of last year, they failed.

That’s when things turned truly ugly. On November 1, the company’s board voted to terminate Frank without cause and buy back his 30.4 percent share for an amount determined by a formula in their shareholder agreement. The termination letter arrived on company letterhead, under the slogan “Paul Frank Is Your Friend.”

If Frank had quit, the formula would have worked out to just a little over $69,000. Because he was involuntarily terminated, it came to $611,378.35. Over lunch at the Cannery in Newport Beach, Oswald tells me that the company’s reason for firing its namesake founder was to get him the higher valuation. In other words, they did him a favor.

Frank doesn’t see it that way. It’s not unreasonable to assume that a purchaser of Paul Frank Industries might pay at least two times the company’s annual sales, or $80 million. (Mossimo, a publicly traded company, is valued at four times its sales.) In that event, Frank’s portion would be worth $24 million, or 40 times more than his partners were offering.

Oswald and Heuser argue that determining a valuation for the company is more complicated than that. According to Frank’s team, when they indicated that he would take $13 or $14 million, Oswald and Heuser’s response was that his share wasn’t worth anywhere close to that much. Frank’s lawyer Peter Paterno says he then turned the table, offering to buy out Oswald and Heuser for $28 million. “I don’t recall the numbers but the truth is the company is not for sale,” says Heuser.

At that point, a flurry of legal maneuvering began. The company requested an injunction to prevent the man born Paul Frank Sunich from doing business under the name Paul Frank. A judge threw out the injunction but cautioned Frank not to start a similar company using a similar name. That’s because there’s really no debate about who owns the trademark “Paul Frank”—it’s the company. “I always tell my students not to let their clients call their companies by their own name,” says New York University law professor Rochelle Dreyfuss. “It always seems to lead to disaster.”

On March 7, 2006, after discovering that Frank had been speaking to companies including Fender guitars, Mossimo, and Target about potential employment, Paul Frank Industries threw him off the board. The company also sued Dan Field and his management group, the Firm, charging that Field had committed copyright infringement by photocopying Frank’s designs in an effort to help him find work.

Oswald and Heuser seemed to think the injunctions and lawsuits would ultimately cause Frank to fold. Given their experience with the man, they felt it wasn’t such a bad bet. In Heuser’s office in Costa Mesa, he and Oswald say they helped Frank establish credit to obtain a mortgage, arranged for his cell-phone bills to be paid on time, and assigned Stacia Hanley to take care of daily minutiae that the majority of us are fully capable of handling ourselves. (Frank responds: “Many executives have an assistant performing exactly the same duties as Stacia. This is incredibly patronizing and emblematic of what was wrong in the relationship with my former partners.”)

Still, their view of Frank as something of an overgrown child is one that even his friends tend to share. “He’s a very unique human being,” says Mossimo Giannulli, founder of the surfwear company that bears his name. “He has a very young spirit and is a real breath of fresh air. But there’s also a naïveté there that quite possibly led to the current situation.”

Talking to me in 2003, Frank’s mother, Donna Sunich, sounded protective of the man she still called “my special boy.” “He hasn’t been living on his own for very long,” she said. “And I miss him so much.” (Frank was 32 when he moved out of his mother’s house, in 1999.)

“Paul has a lot of insecurities,” Hanley says today. “And it’s very easy for him to believe them if someone is not there helping him work through them.”

Frank wouldn’t necessarily disagree. “I naturally have anxiety,” he says. “I could be driving home from work and all of a sudden feel like someone just yelled at me. That’s not a good feeling. All of a sudden I feel like I did something really bad, but nothing bad happened.”

It’s possible that Frank’s acute sensitivity led him to conclude that he had been slighted or insulted in situations where others wouldn’t have felt that way at all. For instance, when Heuser suggested that Frank take the Winnebago on the road to meet some fans for the third time in two years, Frank saw it as Heuser’s way of trying to shift blame for soft sales onto him. “I said, ‘You’re basing this whole brand’s success on the fact that I won’t go out and sign posters?’” says Frank. “‘That’s not fair. You can see that designs I create sell all over the world. I didn’t have to go there to show people. They saw the hard work we did here at the office, and they bought it.’ And then [Heuser] just shook his head. I said, ‘Why are you shaking your head? Why are you treating me like your son?’” When I ask Heuser about this, he lets out a frustrated sigh. “I’m chief marketing officer of the company,” he says. “I was just trying to do my job.”

Frank doesn’t dispute that he ultimately wanted out of the partnership. The debate, at this point, comes down to how much he’s going to get paid for his contributions. Stacia Hanley thinks he got so worked up about the pre-nup that he lost control of the process and is now regretting the outcome. “Maybe he’s just at this point in his life where he wanted to make a change,” she says. “But because it didn’t go the way he wanted it to go, he’s trying to fix it.”

Frank strenuously denies this: “All I want is to be paid the fair value of my interest in the company and to get on with my life without interference from John and Ryan.”

To do that, Frank has recruited an advisory team that has helped him make a few tactical moves of his own. For legal counsel, he is relying on Howard E. King and Peter Paterno of the Los Angeles firm King, Holmes, Paterno & Berliner. He is also working with Sitrick and Company, the Hollywood public-relations firm responsible for minimizing the fallout from R. Kelly’s under-age-sex scandal, forestalling a Christian boycott of The Da Vinci Code on behalf of Sony Pictures Entertainment, and advising supermarket billionaire Ron Burkle in his recent contretemps with the New York Post.

On March 15, a week after his removal from the board, Frank sued Paul Frank Industries for copyright infringement. It turned out that, in December, Frank had quietly registered Julius with the U.S. Copyright Office. It was Frank’s checkmate move, but it would work only if he had never signed exclusive rights to Julius over to the company. Oswald and Heuser were suddenly faced with the prospect of paying him a royalty fee on every Julius-themed product they sold, in perpetuity.

Oswald and Heuser responded that the company owned all the relevant trademarks and copyrights. In an e-mail to their staff in early April, they wrote: “We are sorry that recent changes in Paul’s personal life have included acquiring a team of marketing and PR counselors who appear to be advising him to cut off his nose to spite his face. It is a rather crude attempt to shake the company down for money.”

Four months later, the company’s lawyers stumbled on a document, signed by Frank, that explicitly identified the monkey as the property of Paul Frank Industries. If Frank was disappointed, he couldn’t have been surprised—he admits to not having read most of the legal documents he signed over the years. And while his lawyers accept that the custody battle for Julius is lost, they remain undaunted. “The litigation has never been about owning the copyright,” says Paterno. “It’s about Paul getting a fair value for his share of the company. The copyright suit was just collateral to the main action.”

Paul Frank Industries was more than a job for all three partners; it was their life. Oswald and Heuser put their houses up as collateral for the company’s first loans. (Frank didn’t own one at the time.) Frank met his wife at a store signing. The day Oswald met his second wife, in Stockholm, Sweden, she was carrying a Paul Frank purse. When discussing their employees, Oswald and Heuser refer to them as “the kids.” “The kids told us they wanted to make that ‘We Are Paul Frank’ T-shirt, because they took offense to Paul’s selfish portrayal as a victim at the same time he’s been taking credit for the work they actually do,” says Heuser. “Paul has been painted as this sympathetic artist, but they’re forgetting about the other 130 people who work for the company. At a certain point, it’s not about Paul. He chose to leave. And now he has to deal with the consequences. It’s not fair to the rest of us. You’re married, Paul. You’re 39 years old. Time to put your big-boy pants on.”

“I ask for no one’s sympathy,” Frank responds. “I am grateful to every employee who worked at the company.”

That said, Frank appears to be carrying a psychic burden in the wake of the split. He’s put on a substantial amount of weight in the past few years and has taken to reading pop-psychology books for perspective. “I’m reading this book The Power of Now, by Eckhart Tolle, to try and maintain a positive attitude,” he says. “It’s about living in the present. He says all you have is now. The more you try to live in the past, the more miserable you will be. I just want to get this over with. I just want to work. That’s what makes me happy. When I’m working with my hands, I don’t think about anything else. It’s my moment of Zen. If I don’t work, I start obsessing, and I worry about stuff I don’t need to worry about. I don’t want to use drugs to fix it. I don’t want to rely on medication or anything like that. So I’m handling this cold turkey.”

Both sides insist they’d rather settle than let the dispute drag on through the courts. But negotiations have stalled. According to Dan Field, a recent meeting ended with Frank’s side offering to reduce its demand from $14 million to $10 million and Oswald replying that the board wanted him to go lower, without bothering to make a counter-offer. “So now I’m negotiating with myself?” says Field. “Mind you, it seemed like the real reason he wanted to get together was to find out why he wasn’t invited to the wedding.” While Oswald does admit to inquiring as to why he wasn’t invited to the wedding of his partner of more than 10 years, he also says that Frank was a no-show at that same meeting, and that the numbers Field refers to never came into the conversation. And that’s where it stands: scorched earth legal tactics on both sides, interspersed with questions about why people didn’t get invited to Disneyland.

Even some of Frank’s friends can’t help but wonder why Frank walked away from a situation that should have been far from intolerable. “I think it’s partly Paul’s fault, unfortunately,” says Shag, another Orange County phenomenon, whose cocktail-chic paintings are owned by Ben Stiller, David Arquette, and Whoopi Goldberg. “He was supposed to be their overall idea guy, and he didn’t have to be involved in the day-to-day. I look at him and think, ‘Gee, all you had to do was be the public face, and do personal appearances.’ It was the easiest, best-paid job in the world. But I don’t think he liked doing those things at all. Still, I think it would be great to see him get involved with some other people, start another company, and kick their ass. That would be best for everyone concerned.”

The company’s employees, meanwhile, are rallying around Oswald and Heuser. “I feel betrayed by Paul,” says Austin Brown, the director of film and music marketing. “I’m bummed about what he’s become. No one has left the company since he did, and none of what he’s saying about John and Ryan is true.” And while the company’s Web site used to have an entire section devoted to Frank himself, that’s now gone, replaced with a corporate history that doesn’t even mention that Paul Frank is an actual person. “It makes my brain hurt,” says Frank. “They don’t believe I’m Paul Frank. But when I look for work, they try to stop me. It’s such a contradiction.” (Heuser’s response: “Paul’s name is Paul Sunich, not Paul Frank. We’ve never stopped Paul Sunich from working at all.”)

The most important question facing the people Frank left behind is this: will the dispute harm the business? Most fashion insiders I spoke to told me that it’s unlikely to even register with customers, especially those who, like many teens and tweens, think Paul Frank is the name of the cute little monkey. Only time will tell whether the company can match Frank’s talent for idiosyncratic inspiration. He came up with Worry Bear, for instance, while fighting off a panic attack on a plane, and refers to the character’s mouth as his “worry hole.” But the 2007 designs I saw, including several collaborations with Lego, indicated the presence of a deep design bench.

Cruising through Huntington Beach in his black 1965 Chevy Biscayne, Frank is in a philosophical mood. “All fun things come to an end at some point,” he says. He’s talking specifically about his garage band, the Moseleys, which doesn’t play much anymore, but he could be referring to any number of things. I ask him if he’s worried for Julius. “It kind of scares me sometimes,” he says. “Will they be able to look after him in the right way?”

And what of those looking after Frank? Field has him talking to all comers, from Microsoft, which has voiced interest in having him design something for the Xbox 360 game system, to DreamWorks, which wants to know his thoughts on wardrobe for the next Shrek movie. “Paul is loved everywhere around the world except in that office in Costa Mesa,” says Field. “He’ll be fine.”

It’s true. As long as he has his trusty sewing machine, Paul Frank will be fine. Paul Frank Industries, on the other hand, will never be the same again. The fairy tale is over. — Duff McDonald | Vanity Fair