CRANSTON, R.I. (AP) — The jewelry maker Alex and Ani, which once had a publicly cozy relationship with Bank of America, is now suing the institution for $1.2 billion, arguing that gender bias and greed have led it into a financial "death spiral."
Bank of America wrongly placed the company in default on a $170 million loan and froze a $50 million revolving line of credit because of age and gender discrimination, according to the lawsuit filed Thursday in federal court in New York by the Cranston, Rhode Island-based company.
"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 potentially in the balance," the company said in the lawsuit. "Alex and Ani has already lost several hundred million dollars in value as a result of Bank of America's wrongful actions."
Alex and Ani's founder and CEO, chief financial officer, and senior vice president of brand strategy are all women.
"The endgame is clear: Bank of America wants the women out of power at Alex and Ani," the company says in the lawsuit.
Founder Carolyn Rafaelian was once featured in Bank of America ads to demonstrate its lending practices in helping diverse businesses, the suit said.
That close relationship continued until December 2017, when Andrea Ruda took over as chief financial officer, the suit says.
Alex and Ani alleges in the lawsuit that Bank of America has a "checkered past" with respect to gender bias in lending and that "it is perhaps unsurprising what happened after a triumvirate of strong women" took control at the company.
"Make no mistake, Bank of America has driven Alex and Ani to the precipice," the suit says.
Charlotte, North Carolina-based Bank of America serves as administrative agent for a group of seven banks that extended credit to Alex and Ani and, despite being singled out, has "taken the appropriate steps to enforce the terms of the agreement," bank spokesman Bill Halldin said in a statement to The Providence Journal.
"As the complaint notes, the company has faced serious financial challenges for nearly two years and the banks have worked closely with them during that time," he said. "Bank of America has a demonstrated record of support for diverse businesses that is well noted and widely recognized."
Alex and Ani, founded in 2004, has 104 store locations, most of them in the United States, and also sells it jewelry at hundreds of other authorized retailers including Nordstrom and The Paper Store.