Rihanna sued her former accountants Thursday (July 5), blaming them for the loss of tens of millions of dollars, shoddy bookkeeping, and an ongoing audit by the IRS.
According to the Associated Press, the 24-year-old superstar filed the suit in Manhattan Federal Court under her real name Robyn Fenty, and is seeking unspecified damages against New York-based Berdon LLP and two accountants.
Riri hired the accountants in 2005 when she was just 16 years old and just starting her music career. She claims over the course of her career, up until 2010, Berdon repeatedly breached their agreements, engaged in misconduct and malfeasance, paid themselves excessive commissions, created entities without regard to their effect on her taxes, and failed to document revenue and expenses and implement a proper budget.
Specifically, the singer says they drained tens of millions of dollars from revenues made during four national and international tours over a five-year period.
For example, during the “Last Girl on Earth” tour in 2009, Rihanna learned that the tour had managed “significant net losses” despite robust revenues, and though Berdon pocketed 22% of the tour’s total revenues. They paid Rihanna just 6% of revenues.
The lawsuit 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. Court docs also allege that the practice of paying itself commissions on revenues was not standard in the accounting and business management industry and created a clear conflict of interest.
Rihanna’s lawyers have also blamed the accounting firm for an ongoing IRS audit of her tax returns, saying she was forced to spend significant resources to correct errors resulting from negligence.
Despite the losses, when she fired Berdon in September 2010, her fortunes reversed, the lawsuit said. The “Loud” tour, launched in June 2011 to December 2011, produced a net profit equal to more than 40% of total tour revenues.
The company had no immediate comment, as of press time.