LOS ANGELES, Apr 16, 2002/ --- When Pegasus fired Pamela Dennis from her own company in early 2001, it was not a subtle dismissal: There were guns and heavy security, theft, debt and deceit.

Her story went from one of a burgeoning talent recruited to greatness by an ambitious young conglomerate to fodder worthy of a Hollywood blockbuster.

Now free from her strict confidentiality agreement, Dennis gave an exclusive interview in which she revealed how Pegasus, now the Leiber Group, used armed guards to evict her from the fashion house she founded.

"It got very, very ugly," recalls Dennis. "Armed guards were storming the showroom pointing guns at us. Pegasus people were physically pilfering clothing from my sales person in the middle of a buyer's appointment."

Dennis wasn't the only one to feel the ugly hand of Pegasus; other talented designers were brought to the brink of ruin after signing up with the group. Miguel Adrover closed down his house one year after linking up with Pegasus, while Daryl K cancelled her catwalk show last season and recently closed down her own store.

But none of them was shown the door by gun-toting security guards.

The Pegasus Apparel Group, founded in March 2000 by former Donna Karan President and CEO Stephen Ruzow, was to be America's answer to LVMH. With all the requisite brashness and bravado of a uniquely American enterprise, the company predicted revenues of $400 million in two years.

The idea, or so it seemed, was to grow a fashion empire by acquiring a stable of small but edgy names, incubating their talent while also creating more revenue-generating label-based outlets.

Many industry insiders openly whispered about the improbability of such a venture and decried the company's over confident attitude, but the intensely hubristic way in which it all fell apart for Pegasus stunned even the most jaded players.

Dennis was one of the first designers acquired by the group. Their plan was to introduce a more moderately priced line than the red carpet gowns Dennis built her name and business on. She had established close working relationships with many of the A-list crowd including Calista Flockhart, Geena Davis, Jaime Lee Curtis and Tyra Banks.

This evening line was to bear the Pamela Dennis name and use her patterns and fabrics. To help with the collection, designer Kay Unger, who had experience in inexpensive clothing production, was hired as design consultant. The pairing was to be a fateful one.

"I personally introduced Kay, an old friend, to Pegasus so we could all work together. We were going to build a world brand together," says Dennis. "But I had no idea what they were cooking up behind my back. It was devastating," says Dennis, still puzzled by the ugly turn her relationship with Unger took.

Unger's arrival proved to be a prelude to Dennis' ouster. "Basically Pegasus decided they wanted my name, designs, patterns and brand, but not me. Obviously so they wouldn't have to pay me," she laments.

For Dennis the hatchet finally fell at 8am one February morning. Dennis was called into a meeting with Ruzow, Jason Weisenfeld (the Executive V.P. of Advertising, Marketing and Communications, who ultimately resurfaced at Versace and did not return our calls) and the Pegasus lawyers, and informed of her dismissal.

More than being fired, Dennis was also stripped of her name. Pegasus lawyers made it abundantly clear they still owned the rights.

"After the meeting I was so shocked, but I could not just leave. It was in the middle of market week. We had 71 appointments and I felt a responsibility to those clients," Dennis remembers.

So she and the only staff member not to have been fired, head sales person Hollis Dominic, continued meeting buyers from stores like Harrods, Neiman Marcus, Barneys and Saks over the succeeding days.

Later that same week, during an appointment with Canadian luxury department store Holt Renfrew, armed guards showed up. A pistol-packing security team stood guard while Pegasus employees literally took clothes out of Hollis' hands.

"There was so much backstabbing," Dennis sighs.

Holt Renfrew declined to comment when contacted for this story, as did Barneys. Saks did not return calls by press time.

Ruzow, contacted at Kellwood, where he is now President of Women's Wear, was parsimonious with his comments. "I don't know anything about it. I have no comment," he snapped, before slamming down the phone.

According to Dennis, Ruzow, who was CEO of Pegasus until May 2001 and then Chairman until October 2001, "went on an unchecked, crazy spending spree," seriously contributing to the company's downfall.

"They were $3 million over budget in the first seven months," Dennis said. Among the actions that infuriated Dennis was the high-rolling lifestyle of the Pegasus executives. "They were bought cars, cell phones, state-of-the-art computers and had their offices lavishly renovated. They also hired too many inexperienced people, bought too much fabric, delivered late and of poor quality."

Pegasus also took their top dogs on a five-star jaunt around Europe - a trip that failed to bring in even one deal with a European designer.

Pegasus renamed itself the Leiber Group in May 2001 in honor of its single successful division, Judith Leiber handbags. The move was widely perceived as an attempt to salvage the company by freeing it from certain financial commitments.

One of those commitments yet to be made good on is payment for the licensed name of Pamela Dennis.

"It's a joke," Dennis says. "They have not even kept up the payments on my name that they were so desperate to hold onto."

No one at the Leiber Group would comment on the status of Dennis' payments or any other pending suits when contacted. But they are still adamant about their legitimacy.

"We are a fully functioning company," says John Yoon. Yoon was the only representative of the company willing to speak for this article, though his role at the group remains a mystery ("We don't have titles here," he retorted when asked in what capacity he was commenting).

Dennis, however, is on the rebound. Next year will see the opening of a store to house Dennis' couture, evening and sportswear lines. Everything is in place - except the name. Despite the harrowing ride with Pegasus, Dennis is undaunted.

"It feels good to be coming back," she says. "The new company will be named soon; it may be my mother's maiden name... I am still working on it. I wish I had my own name, but the designs will be Pamela Dennis. [It will be] my brand without my name."

Independent again, Dennis can see her way through the rubble of the collapsed conglomerate to the promise that never faltered. "They have taken everything," she says, "but talent is a gift you cannot take from someone."

Pamela Dennis at her private showing of her Oscar 2002 Collection

Pamela Dennis Oscar 2002 Collection

Pamela Dennis Oscar 2002 Collection