Alex and Ani, the Rhode Island-based charm bracelet company founded by multimillionaire Carolyn Rafaelian, alleges in a lawsuit that Bank of America, one of its lenders, is violating federal law by engaging in gender discrimination against the women-led company, Forbes reported.
The lawsuit, filed in the Southern District of New York on Thursday, seeks $1.1 billion in damages and claims that Bank of America’s “gender bias and greed” poses an “existential threat” to Alex and Ani’s business.
According to the lawsuit, Bank of America falsely declared in December 2018 that Alex and Ani defaulted on its $170 million loan, which it took out to buy a factory, and then cut off its access to a $50 million revolving line of credit. Alex and Ani did default a few times, but Bank of America waived the default and amended their agreement, the company says. (A lender and borrower can come to an agreement to avoid a default.)
“For more than six months now, Bank of America has been both driving Alex and Ani towards bankruptcy and milking it for literally tens of millions of dollars in fees,” the lawsuit reads. “The endgame is clear: Bank of America wants the women out of power at Alex and Ani. It wants to bring back the good old days, when a male Alex and Ani CFO let Bank of America charge whatever it wanted for BofA’s putative ‘services.’”
Bill Halldin, a spokesperson for Bank of America, denies the gender discrimination allegations. He says that BoA served as administrative agent on the company’s credit facility for a group of seven banks, which have taken the appropriate steps to enforce the terms of that agreement.
Alex and Ani alleges in the complaint that after cutting off its revolving line of credit, Bank of America started charging the company for an unused revolver fee every month, increased the interest rates on all the loans, and required the company to hire and pay for a chief restructuring officer, who is male. This cost Alex and Ani over $1.1 billion in expenses, lost revenues and lost market value, the company claims.
Rafaelian, who is 52, started spiritual bracelet company Alex and Ani from her father’s jewelry factory —where her father made American flag pins and costume jewelry — in Providence, Rhode Island, in 2004.
The jewelry firm, which is named after Rafaelian’s two older daughters, employs 1,500 people and distributes through 100 of its own brick-and-mortar stores, plus department stores like Neiman Marcus and Nordstrom. The company, which has been struggling in recent years, has been more focused on online sales lately.
A granddaughter of Armenian immigrants, her father made American flag pins and costume jewelry in a Rhode Island factory where she now makes pieces.
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