Rihanna‘s latest lawsuit is proof that you absolutely cannot trust anyone in entertainment when it comes to handling your money. My advise, manage your own finances. Take the time and educate yourself on the topic and know what’s going on with your shit. What the hell? This is only the latest entertainer to have trouble with accountants. The latter being blamed constantly for causing tax issues for celebrities.
In Rihanna’s situation, the entertainer is suing her former accountants for tens of millions of dollars in losses, shoddy bookkeeping, a failure to recommend trimming expenses when a 2009 tour was losing money and an ongoing audit by the Internal Revenue Service. Let’s not get into the fact that her tours don’t sell out, cause that’s a whole nother post.
The lawsuit in federal court in Manhattan sought unspecified damages against New York-based Berdon LLP and two accountants. A Berdon spokeswoman said the company had no immediate comment.
By the “Last Girl on Earth” tour in 2009, Rihanna learned that the tour had managed “significant net losses” despite robust revenues, though the defendants had managed to pocket 22 percent of the tour’s total revenues while paying Rihanna just 6 percent of revenues, the lawsuit said. It 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.
The lawsuit alleged 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 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.
According to the lawsuit, the singer hired the accountants in 2005 when she was a 16-year-old from Barbados launching her career. She alleged that they 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.
The lawsuit also blamed the company for Rihanna’s 2009 purchase of a new home, saying competent business managers would have told her that her tour was losing money and that it would not be advisable to buy such an expensive home at that time.
Last year, Rihanna sued a real estate company in Los Angeles over the $6.9 million purchase of a hillside home in 2009, saying it had serious structural defects that made it inhabitable.
After going through the above details, it seems to be that Rihanna was taken advantaged of as young artist in the biz, nothing new. But like I’ve mentioned before and will suggest to Rihanna, manage your own shit so you’ll know what’s happening with your rewards. It’s a shame to learn that she’ll be having financial troubles after acquiring so much global success with her records selling millions. That’s just me though.
What do you think?