Jewelry maker Alex and Ani LLC demanded $1.1 billion in damages from Bank of America in a lawsuit alleging lending discrimination against a women-led company that was once featured in advertisements promoting the bank's commitment to diversity.
The Rhode Island-based jewelry maker, which markets bangles and charms at its own stores and some high-end U.S. retailers such as Bloomingdale's and Nordstrom, said it was granted a revolving line of credit by Bank of America to fund operations in 2016. But in December 2018, the bank declared the company in default without warning, setting off a chain of events that cost Alex and Ani more than $1 billion in expenses, lost revenue and reduced market value, according to the lawsuit.
"Bank of America breached the agreement, fraudulently alleging a default that didn't exist," the jeweler said in the court filing. "And for more than six months now, Bank of America has been both driving Alex and Ani towards bankruptcy and milking it for tens of millions of dollars in fees. The endgame is clear: Bank of America wants the women out of power at Alex and Ani."
The jeweler and its founder, Carolyn Rafaelian, were featured in Bank of America advertisements to demonstrate the lender's "commitment to diversity and the American dream," the plaintiffs said. The companies had a "comfortable" relationship until December 2017, when Andrea Ruda took over as chief financial officer at Alex and Ani and cut costs, according to the lawsuit.
Bank of America spokesman Bill Halldin had no immediate comment on the lawsuit.
The bank has promised to invest in women's economic empowerment and leadership by connecting female entrepreneurs to mentoring, capital and other tools that will help them advance their businesses, the suit says. In March, it pledged an additional $50 million for women-owned businesses backed by fashion designer Tory Burch's foundation, doubling its commitment from five years ago, and said it planned to fund community development financial institutions, or CDFIs, that can lend to female entrepreneurs who might not qualify for traditional credit.
But in reality, "the company is decidedly retrograde in its views towards women, toward people of color and towards other protected groups," the jeweler said in the lawsuit. The bank paid out almost $211 million in discrimination penalties since January 2000, Alex and Ani said.
The jeweler is represented by Harmed Dhillion, an attorney who has taken on a number of headline-making First Amendment cases and was considered a contender to lead the Justice Department's Civil Rights Division under President Donald Trump. She represented the University of California Berkeley Republican club after the school canceled Ann Coulter's speech, and James Damore, a former Google employee who alleged the technology company discriminates against conservatives, men and white people.
"Bank of America's mistreatment of iconic American-made, woman-owned and run Alex and Ani, is a staggering example of a company's consumer-facing marketing being at odds with its business values — and the law," Dhillion said in a statement.
The case is Alex and Ani LLC v Bank of America NA, 19-cv-6929, U.S. District Court, Southern District of New York.
