Ralph & Russo administrators sue co-founder over spending
The administrators of Ralph & Russo are suing co-founder Tamara Ralph over alleged lavish spending “with no business justification” by her and co-founder Michael Ralph that they claim reduced the company’s chances of survival.
They’ve been accused using millions of pounds from the business to fund their lifestyles with the massive amounts said to be a key cause of its collapse.
But Ralph has denied the claims, calling them “misconceived and demonstrably false”, according to press reports. She added: “I am constrained in what I can say about these claims pending my formal response but, if they are not withdrawn, I look forward to responding to and defeating them through the proper legal channels.”
The company went into administration in March with the founders blaming the “unprecedented trading conditions” during the pandemic. But the court papers filed by joint administrators Begbies Traynor and Quantuma Advisory say that the company had been “stripped” of cash by its founders.
Neither Ralph nor Russo are still involved with the business, which has been sold to Dressbarn and Stein Mart owner Retail Ecommerce Ventures (REV).
The reports said forensic investigators are working to discover how up to £60 million put into the company by investors between 2018 and 2020 was spent.
The allegations are that money was used to fund the personal lifestyles of the two founders and that money owed to the UK tax authorities was deducted from staff wages but not passed on.
While it’s alleged that some of the spending was on the part of Michael Russo, Tamara Ralph is being sued on the grounds that she failed to comply with her duties as a director.
Meanwhile, the Mail quoted a source close to the company saying the business will move forward under its new owners. The source said a new creative director will be appointed “who will take this world-class brand forward for the next phase of its journey and further develop its unique position within the luxury market”.
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