Dov Charney’s tabloid-ready life has always had plenty of sex.
This story first appeared in the June 24, 2014 issue of WWD. Subscribe Today.
Now it has a boardroom brawl. And it’s still just beginning to heat up in the wake of his ouster last week as chairman, president and chief executive officer of American Apparel Inc.
A filing with the Securities and Exchange Commission Monday detailing Charney’s position said his termination was “without merit” and that he “intends to contest it vigorously.” He is working with Los Angeles law firm Glaser Weil Fink Jacobs Howard Avchen & Shapiro.
After Charney was sidelined — he was technically suspended for 30 days to await termination — he was approached by “certain people, including stock holders…who expressed support for his continued leadership” of the company, according to the filing.
Charney’s been holding discussions with these people about “potential changes to the composition of the board and management of [American Apparel].”
The filing said he also plans to engage with American Apparel’s board on “matters related to governance and board composition, management, operations, business, assets, capitalization, financial condition, strategic plans and the future of the [company].”
In essence, the fight is on and Charney — who owns 27.2 percent of the company, or 47.2 million shares — appears to be attempting to round up a posse to back him up.
Charney’s long been known for his free-loving ways, living with young employees in his L.A. mansion and speaking openly about sex. He’s also been sued repeatedly for sexual harassment, and his handling of a settlement tied to one of the suits is said to have contributed to his firing. He is also said to have had a part in posting online naked pictures of an American Apparel employee who sued him.
Charney’s departure made for a flurry of salacious headlines, stories recounting his escapades and alleged abuses and a video of him dancing naked.
American Apparel, no doubt prepared for the publicity, is rounding up its own team for the fight.
The company said it hired well-known fashion investment bank Peter J. Solomon Co. as financial adviser.
“The hiring of a financial and strategic adviser at this important juncture is in the best interest of our stockholders and will help maximize long-term shareholder value,” said John Luttrell, interim ceo and chief financial officer. “Although the company currently is on track to meet its previously disclosed 2014 EBITDA [earnings before interest, taxes, depreciation and amortization], we are pleased to be working with Peter J. Solomon to ensure that we have adequate access to capital in the future at a reasonable cost.”
While talk of maximizing shareholder value is usually a veiled effort to put out the for-sale sign on a company, American Apparel’s cochairman Allan Mayer told Reuters, “We are certainly not looking to sell the company. If someone came and said they want to buy American Apparel for $10 per share, we’d be crazy to not listen…but by no means [are we] looking to sell now.”
The company’s stock traded as high as 73 cents Monday, but closed down 2.5 percent to 67 cents, leaving it with a market capitalization of $116.6 million.