Rihanna sues ex-accountant for losing millions in tour revenues
Pop star Rihanna has filed a lawsuit on Thursday against her former accountants, Berdon LLP. Rihanna claims that she lost millions of dollars during her tour in 2009.
According to reports, the lawsuit was filed in federal court in Manhattan, which seeks unspecified damages against New-York based Berdon LLP and two accountants. Rihanna, suing under her real name Robyn Fenty, claims that the defendants drained tens of millions of dollars from revenues, all while she launched four national and international tours over a period of five years.
During her “Last Girl on Earth” tour in 2009, Rihanna learned that her tours had suffered “significant net losses” despite the good revenues, though the defendants had managed to get 22 percent of the total revenues of the tour — while paying Rihanna just 6 percent, the lawsuit stated. It is said that the unusual accounting practice of Berdon LLP — paying itself a percentage of gross tour income as commissions — left it no incentive to “counsel” Rihanna to cut the expenses or even put in place financial controls.
The lawsuit of Rihanna also stated that Berdon LLP’s practice of paying itself commissions on revenues was not a standard in the accounting and business management industry, thus creating an apparent conflict of interest. The lawyers of Rihanna also put the blame on the accounting firm for an ongoing IRS audit of her tax returns, saying that Rihanna was compelled to spend significant resources to correct mistakes which resulted from the negligence of Berdon LLP.
The fortunes of Rihanna is said to have reversed since she fired Berdon LLP and its accountants, the lawsuit added. The “Loud” tour in 2001, which stretched from June to December, generated a net profit equal to more than 40 percent of total tour revenues.
According to the lawsuit, Rihanna hired the accountants of Berdon LLP back in 2005 when she was just a 16-year-old teen from Barbados who was starting to launch her career. Rihanna claims that Berdon LLP breached their agreements several times, made entities without regard to their effect on her taxes, engaged in malfeasance and misconduct, paid themselves excessive commissions and failed to document expenses and revenues and implement a proper budget.
The lawsuit also blamed Berdon LLP for Rihanna’s purchase of a new home back in 2009, saying competent business managers would have told Rihanna that her tour was losing money and that it is not advised or recommended to buy such an exorbitant home at that time.
Rihanna also filed a lawsuit last year against a real estate company in Los Angeles over the purchase of a $6.9 million hillside home in 2009, saying the house had serious structural defects that made it uninhabitable.