Cranston-based Alex and Ani has often been held up as a 21st-century American success story.
Its ties to the state’s jewelry manufacturing history and its enormous success in the years following its 2004 founding have made it a particular source of pride for many Rhode Islanders.
Now, however, the company alleges it has been sent into a financial “death spiral” and driven “to the precipice” as a result of “gender bias and greed” on the part of its principal lender.
The lawsuit, filed July 25 in the U.S. District Court for the Southern District of New York, seeks more than $1 billion in damages from Bank of America. A and A Shareholding Co. LLC is also a plaintiff in the case.
The 34-page complaint specifically accuses Bank of America of breach of contract, wrongful interference in its business and violation of the Equal Credit Opportunity Act.
Alex and Ani is represented by attorney Harmeet K. Dhillon of Dhillon Law Group, who serves as California’s Republican National Committeewoman.
The complaint centers on a $170 million loan agreement Alex and Ani agreed to with Bank of America in 2016 as part of the company’s move to purchase the factory that manufactures its jewelry. That agreement also established a $50 million revolving loan to support the company’s day-to-day operations.
Alex and Ani alleges that when Andrea Ruda was appointed chief financial officer in December 2017 – replacing Bob Woodruff – the relationship with Bank of America changed. Ruda joined a leadership team that includes founder and CEO Carolyn Rafaelian and senior vice president of brand strategy Kate Robinson.
“As soon as Ruda started as CFO, Bank of America began advocating for the hiring of expensive outside consultants – and specifically, a third-party Chief Restructuring Officer … to run Alex and Ani’s finances instead of Ruda,” the complaint reads. “As Ruda’s tenure as CFO stretched on, she found Bank of America increasingly uncooperative, despite Ruda’s Herculean –and objectively successful – efforts to shore up and turn around Alex and Ani’s finances.”
Then, in December 2018, Bank of America declared that Alex and Ani had defaulted on its obligations under the 2016 agreement. The company asserts that the bank did so “falsely.” The complaint also points to excessive fees imposed by Bank of America and to restrictions placed on the company’s access to its revolving loan.
“Bank of America’s actions over the past few months – starting with a made-up default, and culminating in a deliberate plan to starve Alex and Ani of credit from any source – have sent a once-thriving American success story into a death spiral, with 1,500 jobs in potentially in the balance. Alex and Ani has already lost several hundred million dollars in value as a result of Bank of America’s wrongful actions,” the complaint reads.
It continues: “Since December 2018, Bank of America’s conduct toward Alex and Ani has been vindictive, obstinate, and petty. But it is hardly inexplicable … 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.’”
In a statement to the media, Bank of America defended its conduct and its “demonstrated record of support for diverse businesses.”