American Apparel Founder Dov Charney Is 'Suing Everyone' With supposedly only $100,000 in his bank account, majority shareholder Charney told a reporter he is going after all those who did him wrong.
By Laura Entis
Opinions expressed by Entrepreneur contributors are their own.
Last week, American Apparel announced that after an internal investigation, it was officially severing all ties with company founder Dov Charney, who was suspended as CEO in June over allegations the he had misused company funds.
On past occasions Charney has indicated that he would fight for control of the company. But last week, when news of the board's decision broke, this retaliatory drive was noticeably tempered:
"I'm proud of what I created at American Apparel and am confident that, as its largest shareholder, I will have a strong relationship with the company in the years ahead," he said in a statement.
The equanimity was short lived.
Related: American Apparel Ousts Controversial Founder for Alleged Misconduct
Yesterday, Charney told Trish Regan at Bloomberg TV that he is rallying support to take American Apparel private and resume a leadership role at the company. He also apparently told Regan that "he's suing everyone, by the way."
Charney also lashed out at Standard General, the hedge fund that loaned him the capital to boost his stake in American Apparel from 27 percent to 43 percent on the promise (Charney claims) that they would help him reclaim a leadership position within the company. Instead, he told Regan, the investment firm -- which now controls Charney's voting rights as collateral -- pulled a fast one on him.
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"I gave them my entire life's work and they agreed to put me back in. But instead, they used this investigation to fire me," he told Regan. "They betrayed me. I gave them my heart. My shares. They teamed up with Allan [Mayer, an American Apparel board member] and worked against me."
In response to these allegations, a Standard General spokesperson said: "As we have stated previously, our objective is to help American Apparel grow and succeed. We supported the independent, third-party and very thorough investigation into the allegations against Mr. Charney, and respect the Board of Director's decision to terminate him based on the results of that investigation. We believe that American Apparel will benefit from the leadership of its new CEO, Paula Schneider, and we are focused on supporting her and American Apparel going forward."
American Apparel's future is currently very much influx. After naming long-time fashion industry veteran Paula Schnieder as its new CEO last week, the company is now evaluating a proposed takeover bid, reportedly from the private equity firm Irving Place Capital. If the deal goes through, while Charney may return to the company in some capacity, he would not be reinstated as CEO, Fortune reports.
As for his own situation, Charney -- whose most recent annual salary as American Apparel's CEO was $800,000 -- painted a bleak financial picture for Regan, telling her that he is down to his last $100,000 and is currently sleeping on a friend's couch in New York City.
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