LEGAL ACTION
Bank of America faces discrimination lawsuit

Jewelry maker Alex and Ani has demanded $1.1 billion in damages from Bank of America in a lawsuit alleging lending discrimination against a women-led company that was once featured in advertisements promoting the bank’s commitment to diversity.

The Rhode Island-based jewelry maker, which markets bangles and charms at its own stores and some high-end U.S. retailers such as Bloomingdale’s and Nordstrom, said it was granted a revolving line of credit by Bank of America to fund operations in 2016.

In December 2018, however, the bank declared the company in default without warning, setting off a chain of events that cost Alex and Ani more than $1 billion in expenses, lost revenue and reduced market value, according to the lawsuit.

The jeweler and its founder, Carolyn Rafaelian, were featured in Bank of America advertisements to demonstrate the lender’s “commitment to diversity and the American dream,” the plaintiffs said.

Bank of America serves as administrative agent on the credit facility for a group of seven banks that have taken the appropriate steps to enforce the terms of the agreement, spokesman Bill Halldin said in a statement.

“As the complaint itself notes, the company has faced serious financial challenges for nearly two years,” Halldin said. “The banks have worked closely with the company during this time. Bank of America’s demonstrated record of support for diverse businesses is well-noted and widely recognized.”

— Bloomberg News

AUTO INDUSTRY
Nissan to reduce jobs by 12,500, cut capacity

Nissan unveiled its biggest restructuring plan in a decade, axing nearly one-tenth of its workforce and flagging possible plant closures to rein in costs that ballooned when Carlos Ghosn was chief executive.

The cuts announced Thursday followed a decimation of Nissan’s quarterly profit, highlighting how a crisis — brought about by sluggish sales and rising costs — is deepening at Japan’s No. 2 automaker after a financial misconduct scandal over Ghosn. Ghosn has denied the charges.

Nissan will reduce at least 12,500 positions globally by March 2023 — its deepest job cuts since 2009 — and slash production capacity, mainly of compact cars at underused plants abroad. The maker of the SUV crossover Rogue and the tiny, low-cost Datsun Redi-Go, had 138,000 employees as of March 2018.

Years of heavy discounting and fleet sales, particularly in the United States, have left Nissan with a cheapened brand image and low vehicle resale values, and also hit profits.

Nissan’s first-quarter operating profit plunged 98.5 percent to 1.6 billion yen ($14.80 million), its worst performance since a loss in the March 2008 quarter.

The auto industry is struggling worldwide. China’s slowing economy, further depressed by a trade war with the United States, has hit demand, even as U.S. consumer confidence has faltered.

— Reuters

ALSO IN BUSINESS

Apple said Thursday it would buy the majority of Intel's smartphone modem business for $1 billion, months after the chipmaker announced plans to exit the 5G modem chip business. Apple will hold over 17,000 wireless technology patents and take on about 2,200 Intel employees after the deal's completion. Intel had positioned itself as the sole source of iPhone modem chips over the past year after Apple entered a prolonged legal fight with previous supplier Qualcomm.

The U.S. Consumer Financial Protection Bureau on Thursday said it had fined a group of New York-based debt-collection firms and their two owners more than $60 million to settle claims they inflated consumer debts and broke the law when attempting to collect the money. The settlement with Northern Resolution Group LLC, Enhanced Acquisitions LLC, and Delray Capital LLC and their owners Douglas MacKinnon and Mark Gray resolves a lawsuit filed in 2016.

COMING TODAY

8:30 a.m.: Labor Department releases second-quarter GDP data.

Earnings: Twitter.

— From news services