Majors

Alex and Ani Drops Lawsuit Against Bank of America

MajorsAug 23, 2019

Alex and Ani Drops Lawsuit Against Bank of America

The jewelry company accused the bank of discriminatory lending practices against a women-led company.

Alex and Ani founder Carolyn Rafaelian was featured in Bank of America advertisements to showcase its commitment to diversity in lending. The jewelry company filed a gender discrimination lawsuit against the bank in July, but dropped the suit Monday.

New York—Alex and Ani LLC voluntarily dropped its discrimination lawsuit against Bank of America Corp. Monday, according to court documents.

The Rhode Island-based jewelry company dismissed the case with prejudice—meaning Alex and Ani is barred from bringing action again on the same claims–after reaching a confidential agreement with Bank of America, as per a report by the Providence Journal.

Alex and Ani declined to comment on the dismissal and directed all inquiries to its lawyer, but Bank of America spokesman Bill Halldin said Thursday that the financial institution did not make any payments in connection with the withdrawal of the lawsuit.

The women-led company filed a lawsuit July 25 in federal court in New York, alleging lending discrimination and asking for $1.1 billion in damages.

The suit claimed that Bank of America, which is one of group of banks that lends to the company, had wrongly declared the company in default in December 2018, cutting its credit line and costing the jeweler more than $1 billion in expenses, lost revenue and reduced market value.

Alex and Ani said it had been treated unfairly by the bank since Andrea Ruda, a woman, took over as chief financial officer in December 2017, when Bob Woodruff left the position.

The bank allegedly pocketed millions of dollars in fees, consulting costs and other reimbursements from Alex and Ani under Woodruff’s year-long tenure, while Ruda was described as “no-nonsense” and was said to be cutting costs and improving the bottom line.

The suit also claimed that as soon as Ruda stepped in as CFO, the bank began recommending expensive outside consultants be hired, specifically a male chief restructuring officer, at Alex and Ani’s expense.

Bank of America refuted the allegations made by Alex and Ani.

“We are pleased that Alex and Ani has voluntarily withdrawn the lawsuit. Bank of America strongly disagrees with the allegations made in the lawsuit and continues to support credit-worthy diverse businesses around the world,” Halldin said.

He also noted that Alex and Ani’s loan is spread out across seven banks, including Bank of America, which also acts as an administrative agent.

“We look forward to continuing to work with Alex and Ani and the six other banks involved in the lending group,” he said.
Lenore Fedowis the associate editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

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