Rihanna Sues Former Accountants, Alleging Millions In Losses
juli 05, 2012 | By Associated Press With Billboard Staff
Rihanna has sued her former accountants in New York, blaming them for tens of millions of dollars in losses, according to several online reports.
The lawsuit was filed Thursday in federal court in Manhattan on behalf of the singer and her touring company Tourihanna. It seeks unspecified damages against New York-based Berdon LLP and two accountants, Michael Mitnick and Peter Gounis, neither of whom still work for the company, according to Reuters. A Berdon spokeswoman says the company has no immediate comment.
Rihanna sued under her real name, Robyn Fenty.
Rihanna says she hired the accountants in 2005 when she was a 16-year-old from Barbados launching her career.
"Between 2005 and 2010, Tourihanna suffered significant losses due to defendants' financial mismanagement and other acts and omissions," the lawsuit claims, citing "exorbitant" commissions, mishandling of taxes, failing to oversee and collect unpaid royalties and concealment of key details from the singer.
The lawsuit said the company was supposed to provide accounting and financial management services. She alleges the company engaged in misconduct and malfeasance, culminating in overall losses in her 2009 "Last Girl on Earth" tour despite large revenues, and pointing out that Rihanna's 2010 "Loud" tour made money after she had left the accounting firm.
The lawsuit revealed that Rihanna was paid just six percent of her tours' gross receipts, whereas Berdon received 23 percent in commission between 2007 and 2010, and did not keep tabs on tour expenses and tax returns. The claims in the lawsuit cover negligence, breach of contract, breach of fiduciary duty, and unjust enrichment.
Reps for Rihanna and Universal Music Group had not responded to Billboard.biz's request for comment as of press time.
remember when her former manager told her WHY she was broke?
Remember kids... it's everybody else's fault:
Rihanna also blames the firm for her disastrous purchase of a $6.9 million Beverly Hills mansion in 2009, saying since-retired Berdon accountant Michael Mitnick told her it "would be a good investment," while failing "to explain the true nature of her financial situation at that time."
In February, she took a nearly $2 million hit by unloading the eight-bedroom contemporary, which reportedly sustained "extensive damage from moisture and water intrusion," for little more than $5 million.
Estate agents listing the property have described it as 'major fixer' with 'extensive damage from moisture and water intrusion' at the roof, windows, doors and balconies.
Rihanna, 23, is suing the former owner of the 8,500sq ft home as well as her estate agent and the property inspector who looked over the home before she bought it.
In a lawsuit filed in August she claimed the home was 'laden with construction defects'.
“By the “Last Girl on Earth” tour in 2009, Rihanna learned that the tour had managed “significant net losses” despite robust revenues, though the defendants had managed to pocket 22 percent of the tour’s total revenues while paying Rihanna just 6 percent of revenues, the lawsuit said. It said Berdon’s unusual accounting practice of paying itself a percentage of gross tour income as commissions left it no incentive to “counsel” Rihanna to reduce expenses or put in place appropriate financial controls.
They... um... they didn't tell her putting on big productions for a tour that left many seats unfilled AND that had to be downsized to amphitheaters and cafegymatoriums was not financially wise??? Poor poor dummy.
And death at her STILL paying Def Jam for that Last Goat in the Barn tour. How does that work exactly? So tell me folks... what's 6% of NOTHING?