Heimanson & Wolf, LLP

Dov Charney’s Sleazy Struggle for Control of American Apparel Posted In: Blog

feat_american29__01__970

When I first reach Dov Charney on June 24, he’s scrambling to raise money, find a partner, try anything to get his company back. His handpicked board of directors had ousted him from American Apparel six days earlier following an investigation that turned up several instances of alleged misconduct. “They’re concerned that an unconventional leader somehow damages the company’s chances of success. But a contrarian, alternative-thinking CEO can bring creative ideas that advance the company, even the industry,” he says. “Oh wait, got to take this.” He hangs up. Two days later we talk again. He doesn’t say it, but he’s already worked out a deal with Standard General, a hedge fund in New York, which has been buying stock in American Apparel in hopes of influencing the fate of the troubled company.

The conversation continues over the next several days. He’s outraged, crass, unapologetic, funny, disarming, constantly jumping between conversations, and mostly off-the-record. “It’s my mother, let me take this, I apologize.” “It’s the finance guys, call me back in two minutes.” At one point, there are four people on a call. He puts us all on hold. Later, it comes out that he’s given Standard General control of his stake in the company he founded—and, along with it, control of his future at American Apparel. We speak again. “Just a second, you might be two minutes on hold, just wait. … Excuse me one second. … One second … oh s-‍-‍-, one second, please.”

Click here to read the full article.