Jewelry designers and manufacturers Alex and Ani LLC is suing Bank of America Corp. for more than $1 billion in damages and alleging discrimination.
The female-led company argues that the bank fraudulently declared it in default of a $50 million line of credit last year and that it consequently is driving the jewelry firm toward bankruptcy.
Bloomberg noted that this development is a "stark turnaround from a 2014 commercial that touted Bank of America's help in making Alex and Ani a "global sensation."
Alex and Ani is based in the US jewelry state of Rhode Island. There, makes and markets bangles and charms, selling its products at its own stores and at some high-end U.S. retailers such as Bloomingdale's and Nordstrom.
The Bloomberg report said that Alex and Ani had got its credit line with Bank of America in 2016 to fund operations, according to a lawsuit filed earlier this month in New York federal court. "But in December 2018, the bank declared the company in default without warning, setting off a chain of events that Alex and Ani claims led to $1.1 billion in expenses, lost revenue and reduced market value."
"Bank of America breached the agreement, fraudulently alleging a default that didn't exist," the Alex and Ani company 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, Bloomberg wrote.