Dov Charney is proving just as confident in navigating the courtroom as he is in the boardroom.
A little more than a week after Charney himself made an appeal for more time to find a new legal team in the Delaware Court of Chancery for a separate case involving New York hedge fund Standard General, he has now entered the docket in American Apparel’s bankruptcy. An objection letter, filed in court today, comes from Charney himself and pushes back against information laid out in the company’s disclosure statement.
“The disclosure statement contains numerous material misstatements of fact regarding the company, and as such, hinders the ability of a hypothetical reasonable creditor or investor to make an informed judgment about the [reorganization] plan,” Charney wrote in his objection filed today.
Companies that file for Chapter 11 bankruptcy are required to provide a disclosure statement so creditors have sufficient information to evaluate a proposed reorganization plan.
Charney was dismissed from American Apparel, the company he founded, late last year. He has contended many times now in various lawsuits that have been filed since his firing that the move was all part of a larger plan to remove him so that the company could be sold.
His objection to the disclosure statement begins with a correction on the year the company was founded and in what state and moves on from there.
He takes issue with the characterization that the company embarked on what it called “a growth initiative” in 2009, saying such expansion plans were largely capped given the economic environment of the time. Charney also disputes the company’s characterization of an “unforeseen personnel loss” due to the Immigration and Customs Enforcement inspection.
The objection moves all the way up to more recent times in which Charney criticizes the American Apparel board investigation into his conduct, calling it a “complete sham,” as well as the handling of a private equity firm’s offer to buy the company this year at $1.30 to $1.40 a share.
“The board chilled this takeover offer, and other potential opportunities to acquire the company, by preventing interested parties from speaking with Mr. Charney, the founder and largest shareholder in the company,” his objection reads.
Charney could not be immediately reached for comment and a spokesperson for American Apparel said the company declined to comment beyond what it already laid out in its filing.