Ralph & Russo may have exited administration last week after being sold to the owner of Dressbarn, but, now, the lawyers need to be called in for something else. The administrators who handled the sale of the Ralph & Russo to Retail Ecommerce Ventures, have filed suit against Tamara Ralph, one of the company’s cofounders, seeking damages of 20.8 million pounds. The suit was filed in England’s High Court.
Paul Appleton of Begbies Traynor Group, one of the brand’s two joint adminstrators, and his lawyer, Daniel Morrison, have said Tamara Ralph siphoned money from the company, engaged in financial mismanagement, and breached contract by attempting to set up a competing business.
Ralph has already denied the claims. Appleton also took the opportunity to point out that Ralph & Russo’s financial problems began before COVID-19 and the directors of the company engaged in practices that stripped the company’s cash reserves and left them without working capital to pay their bills. Between 2009 and 2019 Ralph & Russo raised 70 million pounds, but according to Appleton the balance sheets have been left insolvent due to money mismanagement.
In a statement, Morrison, the lawyer for the administrators, said, “[there is a] clear narrative showing that (Ralph) and Mr. Russo, treated the (company’s) money as their own, consistently misappropriating the (company) funds for their own benefit. Most disturbingly, these patterns of spending continued until at least December 2020 — a time when the fragile financial state of the company would have been extremely clear to (Ralph).”
Ralph abruptly exited the company after it was sold, and has said that she has new projects in the works, though she has revealed no specifics as to what her next move will be. She has vehemently denied the claims that she engaged in any illegal behavior.
Ralph & Russo went into administration this past March after the company took a severe blow from the global COVID-19 pandemic. The company had a strong list of prospective buyers, but ultimately ended up in the hands of Retail Ecommerce ventures, the parent company to Dress Barn, Pier 1, and Stein Mart.