Rihanna is suing her former accounting firm for mismanaging her finances, claiming they cost her millions of dollars.
The lawsuit, which was filed in a Manhattan federal court, claims that New York-based Berdon LLP and former employees Michael Mitnick and Peter Gounis caused “significant financial losses” for the 24-year-old singer and her tour company, Tourihanna, between 2005 and 2010.
The suit claims that the accounting firm charged “exorbitant” commissions from Rihanna’s “Last Girl on Earth” tour, and accuses them of mishandling her foreign and domestic taxes by withholding more funds than necessary, failing to file taxes on time — causing late penalties, and failing to monitor unpaid song royalties and problems with the way Universal Music Group tracked the royalties.
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. She is described as “a minor with a booming music career and no knowledge or understanding of financial matters whatsoever.” (Rihanna was 16-years-old when Berdon began handling her finances.)
The lawsuit says Rihanna lost millions of dollars during “The Last Girl on Earth” tour after the firm failed to reconcile costs versus revenues while still paying itself millions in fees, estimating that between 2007 and 2010, the accountants earned an amount equaling 23 percent of total tour income, while Rihanna earned 6 percent. It goes on to say that the firm performed little record-keeping, and that during 2008 and 2009, the accountants kept only 2 to 4 percent of all receipts for exenses charged on Rihanna’s personal credit card.
As a result of Berdon’s mismanagement of tax returns, the singer is now being audited by the IRS. The suit claims breach of contract, negligence, breach of fiduciary duty and unjust enrichment.
photo: Will Alexander/WENN