Rihanna is suing her former accountants claiming they messed up her finances and earned huge commissions from concert tours that resulted in her losing millions of dollars.
In the lawsuit filed in Manhattan federal court, the 24-year-old singer and her tour company, Tourihanna, are seeking an unspecified amount of compensatory damages and loss of earnings from accounting firm Berdon LLP and former employees Michael Mitnick and Peter Gounis.
The suit, filed late Tuesday (July 3), claims they caused “significant financial losses” between 2005 and 2010 by charging “exorbitant” commissions from Rihanna’s 2010 “Last Girl on Earth Tour.” It also accuses Berdon of mishandling Rihanna’s foreign and domestic taxes and failing to monitor unpaid song royalties.
“Between 2005 and 2010, Tourihanna suffered significant losses due to defendants’ financial mismanagement and other acts and omissions,” the lawsuit said.
Rihanna, whose real name is Robyn Fenty, is referred to in the suit as a financial novice who found fame at a young age and relied heavily on her accountants. Her music management introduced her to Berdon in 2005 when she was a 16-year-old and “a minor with a booming music career and no knowledge or understanding of financial matters whatsoever.”
The lawsuit said the accountants concealed facts regarding her finances, and in a deal Rihanna’s lawyers called unusual, earned commissions based on a percentage of Rihanna’s gross receipts which were “exorbitant and expensive.” In addition, the firm assumed control over the singer’s affairs beyond the industry standard and failed to maximize her personal net worth and long term wealth, the lawsuit said.
The lawsuit also said several of the Barbados-born singer’s national and international tours between 2005 and 2010 suffered losses compared to her last tour “Loud” that was a financial success after she had parted ways with Berdon.
Rihanna claims in the lawsuit that she lost millions of dollars during “The Last Girl On Earth” tour after the firm failed to reconcile costs vs. revenues while still paying itself millions in fees. She estimates that between 2007 and 2010, the accountants earned millions in commissions on tour gross receipts in an amount equaling 23 percent of total tour income, compared to 6 percent for Rihanna.
The firm did not do monthly planning reports, and performed little record-keeping of Rihanna’s personal and business expenses, including those for Tourihanna, according to the suit. For example, during 2008 and 2009, the accountants kept only 2 percent to 4 percent of all receipts for expenses charged on the singer’s personal credit card, the suit said.
It also failed to uncover millions in unpaid royalties and problems with the way in which Universal Music Group (UMG) label Recordings was tracking song royalties. The suit did not mention Rihanna’s direct label, Def Jam, also owned by UMG.
Accountants mishandled foreign and domestic taxes by withholding more funds than necessary, leading to “a significant losses of tax benefits” and failed to file taxes on time, causing late penalties.
The singer further claims that as a result the IRS is now auditing her because Berdon mishandled tax returns between 2008 and 2010. The suit includes claims of breach of contract, negligence, breach of fiduciary duty and unjust enrichment.
Also On Black America Web:
This Week’s Celebrity Instagrams (10/15-10/21)
31 photos Launch gallery
1. Just a NY girl with BIG dreams....
1 of 31
2. HAPPY CHILDREN=QUALITY PARENTING. We don't always see eye to eye on everything and that's normal. We're human beings. But we come together and do it right for what's important, the kids. We are not enemies, we are parents. And we are parents 1st. S/O to @monyettashaw for making Mason's bday memorable. S/O to @itscrystalsmith at home taking care of our other lil' Prince. ❤️❤️❤️ THIS IS WHAT CO-PARENTING LOOKS LIKE. #Blessed #Happy #AboveTheDrama #BiggerThanUs
2 of 31
3. So happy to finally be able to share with you all that I’m the new Global Brand Ambassador for @Revlon! Follow my day on RevlonSnaps. Yay! Choose Love, Everybody! #RevlonXCiara #chooselove #ad
3 of 31
4. Glam on point!!!@makeupbymotoko & @shaylinjoneshair #easybreezy @lifetimetv #beachesmovie #january2017 😘
4 of 31
5. ✨True love ✨📸: @jessiemarrerophotography
5 of 31
6 of 31
7. Today was not easy..but by the grace of God we all got through it. Words cannot express our gratitude for all of your Prayers, Positive thoughts and Support for us throughout the years. Tommy will be missed but most certainly never forgotten...And PLEASE don't ask "Where's Martin?.." he was there too...just not in this picture. Lol! God bless you all.. #LoveConquersAll #MartinShow
7 of 31
8 of 31
9. West coast get ready for #RockyHorror. I will be live tweeting again. #letsdothetimewarpagain
9 of 31
10. #THEKEYS pre order yours now ... Available everywhere #NOV22 #WeTheBest 🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑
10 of 31
11. We about to ROCK at #KCABlackBall!! All for our life-changing effort to end 🌎 AIDS.
11 of 31
12. Today's #SNAPJACK is brought to you by @yazzthegreatest 😂😂😂💋💋💋
12 of 31
13. Damn girl you kinda old to be headed to the Go Go. You coming in at the age they leaving. LMAO
13 of 31
14. Daddy daycare B-Boxin with @acewellstucker @shopraisingace
14 of 31
15. #FBF Naviyd & URV "LIL MONSTERS"
15 of 31
16. HAPPY BIRTHDAY TO ONE OF THE BIGGEST LEGENDS IN OUR HIPHOP HISTORY! @snoopdogg CONTINUED BLESSING AND LOVE FAMILY!!!!! REAL OG!
16 of 31
17. Thank you for a beautiful night VSU! Let's do it again! #HOMECOMING
17 of 31
18. Had a great time this morning with my familia Erica, Griff & Truth!!
18 of 31
19. Check out my interview on @essence facebook live. #inmyownwords #nycpromo #day2
19 of 31
20. #She💋 #tbt #TheCoveAtTheAtlantis #DawgPawsAndAll
20 of 31
21. Bae #retailtherapy
21 of 31
22. Why me and @coryhardrict got the same pose... and notee... new mouth #naked
22 of 31
23. When my husband is my personal 'hype-man'! it kills me every time! 💜😂 #WHATNOW #lostfiles📷
23 of 31
24. Diggy Simmons
24 of 31
25. Hand full of @jacquieaiche 💙💎💍 @esnail_la 💅🏾
25 of 31
26. SuperSoulers! You can watch my interview with Carl Lentz live from my Facebook page, tomorrow at 11a ET| 8a PT. #SuperSoulSunday
26 of 31
27. 💋 .. When the friendship is easy like Sunday morning. ☀️
27 of 31
28. Sunday mornings are the best........... hugs and cuddles with my angel
28 of 31
29. #huggar16 #hellohuggars
29 of 31
30. My gym is everywhere!.. #RnBMoney #TheGeneral 📸: @twelvepastseven
30 of 31
31. Nothing I would rather be doing... Rocko setting up our movie, Romelō working on a puzzle & Laiyah singing and sharing all she's learning at school... I'm so grateful for the joy they've brought into my life ... Praying for peace , joy & love in the home of EVERY family ♥️ #HeadScarfPJSunday LOL 😂
31 of 31