LOS ANGELES — Dov Charney’s lawsuit against his former legal team has been sent to arbitration.
A judge ruled at a hearing Monday in favor of the request for arbitrage by Los Angeles law firm Glaser Weil Fink Howard Avchen & Shapiro LLP. Charney filed a lawsuit against the firm in Los Angeles Superior Court in March, alleging legal malpractice. He retained the firm in June 2014 to represent him on matters related to his suspension and firing from American Apparel — a set of events that kicked off a nearly yearlong, very public battle that involved a number of lawsuits filed by Charney and former employees along with protests calling for reinstatement of the American Apparel founder. This culminated in a last ditch effort by Charney and investors to buy the firm out of bankruptcy, which the company filed for in October. However, a judge approved the company’s plan for reorganization, allowing it to emerge from bankruptcy minus its founder.
Charney contends in his lawsuit, in which he is representing himself, that Glaser Weil was not experienced enough to advise him on a number of matters, including shareholder rights or federal securities laws, ultimately leading “me to lose a hundred million dollars and my life savings.”
The firm in June requested the case be sent to binding arbitration in addition to attorney’s fees. Charney, who could not be immediately reached for comment Tuesday, argued in a court filing that arbitration could not be enforced since the two had not entered into such an agreement. He also noted in his opposition filing in July that such an order to compel arbitration would “cause a chilling effect on plaintiff’s right to bring a malpractice claim due to his inability to pay arbitration fees.”
The next hearing on the status of the arbitration is scheduled for February. It’s unclear just how long this matter will take to be resolved, according to Glaser Weil partner and litigation department chair Patricia Glaser.
She went on to call Charney’s allegations of malpractice “clearly without any merit at all.”
“Shame on me, but I love the guy. He’s just misguided — in this case, not generally — he’s completely misguided,” she said. “I feel badly for him.”