Attorneys for the Los Angeles-based firm filed an anti-SLAPP motion in Los Angeles Superior Court in response to the legal complaint founder and former ceo Dov Charney filed in May.
The lawsuit centers on statements Brown made in an April employee memo that Charney alleges were false. These included statements such as “The old way of doing business [under Charney] was not sustainable and brought the company to the edge of financial ruin.”
Charney is seeking $20 million in addition to legal fees in the suit. It’s one of several that have tied up the struggling company, hedge fund Standard General, employees and Charney himself in litigation.
The former ceo has been attempting to find a way back into the company, which he was officially fired from late last year for misconduct. Charney contends in court filings the termination was illegal.
American Apparel mentioned in its motion Friday alleged verbal and physical abuse to employees, improper use of company funds and examples of illicit text messages and e-mails sent by Charney to employees and models among other details outlined in the filing.
The motion argues Brown’s statements in the employee memo are protected under the First Amendment and were also true based on the evidence submitted in court.
Attorneys for the company said in court documents the defamation lawsuit is “the latest in a series of public relations ploys” by Charney “as he wages a vendetta” against American Apparel.
The company declined comment on the latest motion.
Keith Fink, an attorney for Charney, called the allegations set out in the motion false.
“They are putting this out there because they are desperately trying to distort public attention to the fact that Mr. Charney’s firing was illegal, that his rights as a shareholder of the company were disenfranchised and that Standard General and their appointed management team are losing control of the business from a financial point of view,” Fink said in a statement. “Sales are down, profits are down and the company is running out of money. This evening the stock price closed at its lowest level since the company’s inception.”
Charney dealt his own legal blow Friday with another defamation suit, again in Los Angeles Superior Court, against American Apparel and former board member David Danziger.
American Apparel shares closed down about 15 percent Monday to $0.41 for a market value of $73.79 million. The stock’s off about 60 percent since the start of the year.