UPDATED: 7/6/2012 at 1:24 PM EDT
“This lawsuit is meritless and we will staunchly defend against it” Ron Storch, Partner of Operations at Berdon, LLP told BlackEconomicDevelopment.com. The firm is apparently looking forward to its day in court.
By Norm Bond, www.BlackEconomicDevelopment.com
In the latest case of accountants pencil-whipping an uninformed, unsophisticated and trusting music industry novice, the New York accountancy Berdon LLP is being sued by R&B megastar Rihanna. When 16-year-old Robyn Fenty began working with the New York accounting firm she was “a minor with a booming music career and no knowledge or understanding of financial matters whatsoever” according to her attorneys.
Today the recording artists career includes winning 5 Grammy Awards, 18 Billboard Music Awards, and 5 American Music Awards. She has sold over 25 million albums as one of the best selling artists of all time.
“Despite having earned millions of dollars in revenues during Berdon’s tenure Fenty learned that her net income after payment of expenses and exorbitant commissions to defendant was a fraction of that amount.” Further the lawsuit states, 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.”
Consider that the firm told Rihanna she lost millions during her “The Last Girl On Earth” tour in 2009, but still managed to pay itself millions in fees. Incredibly the accountants earned 23 percent of gross tour receipts — while Rihanna got 6 percent. After she walked away from Berdon, Rihanna earned large sums with her “Loud” tour. This tipped her off there was some shady bookkeeping being done by her former accounting firm.
Rihanna, 24, and her tour company, Tourihanna, are seeking unspecified compensatory damages and loss of earnings from the accountancy firm and two former employees, Michael Mitnick and Peter Gounis. The Umbrella hitmaker has accused the suits at Berdon of neglecting to properly manage her cash flow and expenses, uncover millions of dollars in unpaid royalties, and dissuade the diva from purchasing a luxury home in California in 2009.
Berdon has yet to comment on the lawsuit.