BOARD MATTERS: American Apparel Inc. is expected to name five new directors to its board in the next day or so, according to a source familiar with the situation. Once the company makes the appropriate regulatory filing, it will take 10 days for the board to be officially reconstituted and begin weighing the fate of former chief executive officer Dov Charney, which could be determined in mid-August.
Charney was ousted last month amid allegations that he allowed explicit photos of a former employee to be posted online. He was also accused of making significant severance payments to former employees to shield himself from personal liability. He has denied the charges and linked up with Standard General after his ouster. The move effectively gave control of his shares to Standard and paved the way for his return to American Apparel as a consultant. Charney’s future at the company he founded appears to now hinge on how the board reads the results of an investigation into his conduct by FTI Consulting.
This story first appeared in the July 23, 2014 issue of WWD. Subscribe Today.
The only two holdovers from the board that tried to dismiss Charney will be Allan Mayer and David Danziger, who will remain cochairmen.