I am sure that some of you are wondering; why are we reporting on Rihanna’s problems when our do not come to Political Arena to get “pop culture” news. There is a very important lesson about the law that is demonstrated in this finely written article by Andrew Lu at Findlaw.com courtesy via Reuters.
Some people may believe that “a contract is a contract is a contract”, you signed on the dotted line so now you must take your medicine. In many cases this is NOT the case. Insurance contracts are an exception in most states as the Department of Insurance can step in to protect the consumer because most insurance contracts are deliberately written so that they are very difficult to understand. Another exception is when you hire people who are experts in certain fields to act on your behalf.
There is something that the laws in most state laws recognize called GAPP – Generally Accepted Practices and Procedures. When people who are ethically bound to act in your best interests don’t they are in violation of GAPP and legal action can result.
Berdon served as Rihanna’s accountants for several years as the young star rose. In her lawsuit, Rihanna says that Berdon abused their position of trust and fleeced her for tens of millions of dollars, reports Entertainment Weekly.
Rihanna says she signed with Berdon when she was16 and had just come to this country from Barbados. Being young, foreign and rich, Rihanna claims that she was easily taken advantage of by the accounting firm. The singer is seeking unspecified damages, but says she lost “tens of millions of dollars” to the firm.
In one example, Rihanna says that Berdon negotiated a deal with her where the accounting firm would get paid a percentage of the total gross proceeds from a concert tour. Stunningly, the firm made off with 22% of the total revenues from the tour. Rihanna’s cut was only 6%, reports Entertainment Weekly. In her lawsuit, Rihanna makes note that this billing method by her accountants is far from standard practice.
Generally, when you hire an accountant, you are hiring someone to act in your best interest. The accountant is considered your fiduciary, and should not have a payment method or other incentive that conflicts with your best interests. In Rihanna’s case, she claims that her accountants had such a conflict. They wanted to profit as much as possible off of her, to the obvious detriment of their client.
Many young stars are taken advantage of by trusted advisors. By filing the lawsuit, Rihanna shows that she spotted the possible wrongdoing at an early age and is taking steps to recover her losses.