BAC Bank of America Corporation

By Alexander Gladstone 

Alex & Ani LLC is fighting Bank of America's claim that the jewelry retailer defaulted on a $50 million credit facility, filing a lawsuit accusing the lender of gender discrimination.

The Rhode Island company said Thursday that Bank of America has been driving Alex & Ani toward bankruptcy after the company replaced a male chief financial officer with a female successor in 2017. Bank of America raised the company's interest rates and forced it to pay for outside consultants from turnaround firm Berkeley Research Group, according to the complaint.

A spokesman for Bank of America said it is the administrative agent for a syndicate of seven bank lenders and that the decision to declare a default wasn't made by Bank of America alone.

"As the complaint itself notes, the company has faced serious financial challenges for nearly two years," the spokesman said. "The banks have worked closely with the company during this time. Bank of America's demonstrated record of support for diverse businesses is well-noted and widely recognized."

Founded in 2004 by entrepreneur Carolyn Rafaelian, Alex & Ani is a producer and retailer of necklaces, bracelets and other jewelry.

The lawsuit, filed in the U.S. District Court in New York, said Bank of America took action against Alex & Ani after the company acquired a supplier, asserting that an $8.73 million fee related to the deal paid in November 2018 wasn't permitted under the loan terms. After that, Alex & Ani was cut off from a critical source of liquidity, the company said.

Alex & Ani said it didn't default and that the payment was allowed under the terms of the loan. The complaint argued that gender discrimination was behind Bank of America's decision to declare a default.

"The endgame is clear: Bank of America wants the women out of power at Alex and Ani," the lawsuit said.

Alex & Ani said the bank's actions cost it more than $1.1 billion in "direct expenses, lost revenues, and diminished market value."

Write to Alexander Gladstone at alexander.gladstone@wsj.com

(END) Dow Jones Newswires

July 25, 2019 20:07 ET (00:07 GMT)

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