Following last week’s investment in American Apparel Inc. by a group of Canadian funds led by private investor Michael Serruya, controversial chief executive officer Dov Charney no longer holds a majority stake in the company he founded. However, the retailer said Tuesday the financing agreement stipulates that Charney has rights to three additional installments of shares beginning in 2013 if certain stock price benchmarks are reached, ranging from $3.25 to $5.25. If all the targets are met, Charney would receive another 39.7 million shares, regaining a majority stake in the company.
American Apparel shares stayed level on Tuesday on heavy trading, after soaring 27 percent a day earlier on news of last week’s financing package, which rescued the retailer from a potential bankruptcy. The shares ended the day unchanged at $1.58. Volume was about five times average.
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