Jewelry maker Alex and Ani accused Bank of America of “greed and sexism,” claiming in a lawsuit Thursday that the bank wrongly declared it in default of a $50 million credit facility agreement.
The result has been costly, the company claims: It’s led it to incur over $1.1 billion “in direct expenses, lost revenues and diminished market value,” according to the suit filed in New York federal court. The suit seeks some $1.1 billion in damages.
The company claims Bank of America’s approach toward it changed after it brought on a female chief financial officer in December 2017. The company claims that since then, the bank grew hostile and took a series of steps including blocking access to its revolving credit line and then also imposing an unused revolver fee on the company. The bank declared the default in December 2018, according to the complaint.
“No amount of acumen, savvy and hard work can fully overcome a primary lender’s sustained, illegal deprivation of operating capital, coupled with millions of dollars a month in unnecessary fees and interest demanded at the threat of liquidating the company,” the company said in its suit.
The suit claimed the bank was pushing “Alex and Ani toward bankruptcy.”
Bank of America couldn’t immediately be reached for comment Thursday evening.
Alex and Ani argued that reliable access to the revolving line of credit was crucial to a seasonal business like the jewelry industry, which relies on the ability to stock up for holidays such as Mother’s Day and Valentine’s Day.
Because access to the credit line was cut off, the brand said it could wind up losing some $10 million in revenues for this year’s Valentine’s Day and Mother’s Day shopping seasons.
The company said it is “81 or more days late” with its payment to vendors and owes some $16 million to suppliers.
“The endgame is clear: Bank of America wants the women out of power at Alex and Ani,” the complaint said. “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.'”
The bank has generally sought to brand itself as an ally of women-led business. In March, it said it would put down $100 million to the Tory Burch Foundation to go toward loans to small businesses owned by women.