“Since 2008—when it helped drive the U.S. economy into the ground, then took money from the government to keep itself afloat—Bank of America has made a lot of promises.” One of those promises was to “invest in women’s economic empowerment and leadership.” Now, the banking giant – and its “time-tested values of greed and sexism” – has allegedly failed to make good on that particular vow, and has landed on the receiving end of a $1.1 billion lawsuit filed by Alex and Ani, which says that the bank’s fraudulent “image-rehabilitating marketing” efforts and its “discriminatory and illegal lending practices” are an “existential threat” to its otherwise booming business.
According to the 34-page complaint that Rhode Island-based Alex and Ani filed in a New York federal court last week, the popular bracelet-maker entered into an agreement with Bank of America (“BoA”) in January 2016 in furtherance of which the bank agreed to provide a revolving line of credit to help fund Alex and Ani’s operations, as long as the company “made timely payments and otherwise complied with specified contractual terms.”
Alex and Ani – whose $33 dollar or so bangle bracelets are selling at a rate of 10 million a year, propelling the brand to unicorn status, and landing founder Carolyn Rafaelian on Forbes’ “Richest Self-Made Women” list – asserts that it held up its end of the bargain by meticulously making its payments on time and in accordance with the parties’ terms, but “in December 2018, BoA broke its promise.”
“With no warning, and in breach of its contractual obligations, BoA falsely and fraudulently … declared a default under the 2016 agreement,” the 15-year old jewelry company claims. In rescinding their agreement by declaring a default that did not exist, a move that coincided with the appointment of Alex and Ani CFO Andrea Ruda, BoA “cut off Alex and Ani’s access to its revolving credit line.”
In case that is not enough, Alex and Ani claims that BoA “tortiously interfered with [its] business, starving it of marketing and operational funding [it] was contractually guaranteed under the agreement.” And for more than six months, “BoA has been both driving Alex and Ani towards bankruptcy and milking it for literally tens of millions of dollars in fees” stemming from the “falsely”-declared default. In doing so, BoA “set off a cascading series of events that have cost Alex and Ani more than $1.1 billion in direct expenses, lost revenues, and diminished market value,” all while using the female-founded and run brand “as free advertising for its supposed commitment to diversity and the American Dream.”
It turns out, behind its “woke advertising,” BoA “is decidedly retrograde in its views toward women, toward people of color, and towards other protected groups,” the complaint asserts.
BoA has a “long, entrenched history of illegal discrimination,” particularly when it comes to women, Alex and Ani argues, pointing to “eight separate [disclosed] discrimination settlements, totaling $210 million, between January 2000 and January 2019,” and a 2010 lawsuit, in which BoA was sued for gender discrimination by a class of approximately 4,800 current and former female financial advisers.
In 2016, BoA “was sued again for gender discrimination,” Alex and Ani’s complaint notes, with “the plaintiff in that case —one of BofA’s top female employees—describing the bank as a ‘bro’s club’ that favored male employees over women.”
The bank’s “sexist, discriminatory … culture” has since taken to targeting Alex and Ani, and the jewelry company “brings this case to put an end to [BoA’s] nonsense.” Alex and Ani says that is bringing this lawsuit “to regain what it would already have had from a fair, law-abiding lender: the benefit of its bargain under the Agreement, and a bank whose practices match its glossy marketing—i.e., one that doesn’t recoil at female-run corporations and women in the boardroom.” More than that, the jewelry company says that “it is time for BoA to treat Alex and Ani fairly—and in accordance with [its] obligations—even though Alex and Ani is run by strong, powerful women.”
Alex and Ani have filed claims for breach of contract, tortious interference with prospective business relations and violation of the Equal Credit Opportunity Act, and are seeking declaratory and injunctive relief and $1.1 billion in compensatory damages, punitive damages, and disgorgement of “ill-gotten gains.”
“Bank of America’s demonstrated record of support for diverse businesses is well-noted and widely recognized,” a spokesman for BoA told Bloomberg.
UPDATE (August 20, 2019): Less than a month after Alex and Ani filed suit, and before BoA has filed a response, it has voluntarily dismissed its case in its entirety. In the filing, counsel for the jewelry company states that it is moving to “voluntarily dismiss the action with prejudice,” noting that the dismissal “has been filed before Defendant has filed an answer or a motion for summary judgement.” While the impetus for the dismissal was not cited in the filing, it almost certainly indicates that the parties settled their differences out of court by way of a confidential settlement agreement.
*The case is Alex and Ani LLC et al v. Bank of America N.A. et al, 1:19-cv-06929 (SDNY).