In terms of its length, the lawsuit between American Apparel Inc and its founder Dov Charney has not been long. But in terms of its accusations, intrigue, bitterness and graphic details it surely takes at least part of the cake.
The lawsuit continues to twist and turn, this time with Charney filing a suit that accuses both company officials and Standard General the hedge fund of conspiracy.
But there’s much more to this. Document allegedly describing Charney with stored footage of him having sex with models and employees as well as sending sexually explicit messages to employees have already emerged.
The LA Times reports that Charney is seeking damages of $100 million and wants agreements rescinded that gave control of his American Apparel stock to Standard General and removed him from the company’s board.
Charney’s complaint, filed Wednesday in Los Angeles County Superior Court, lays out an effort by current company board member Allan Mayer, former Chief Financial Officer John Luttrell and former board members David Danzinger, Robert Greene, Marvin Igelman and William Mauer to trick Charney into diluting his ownership stake in the company and then oust him.
In the lawsuit, Charney noted that the board filed a proxy statement with securities regulators praising his leadership ahead of last June’s shareholder’s meeting.
“Based on these statements of confidence,” the lawsuit said, Charney voted to reelect “the very same board members filing that proxy statement, who, immediately after the shareholders’ meeting, voted to terminate him.”
Although Charney’s lawsuit echoes many of the allegations he has made in previous legal documents, it presents new details of the ousted CEO’s version of how events unfolded.
For instance, the suit said Standard General approached American Apparel in March 2014 with a financing proposal, but company directors rejected the New York investment firm’s money in favor of a financing arrangement that reduced Charney’s ownership stake to 27% from 43%.
The suit contends that American Apparel and Standard General subsequently worked together to ensure that Charney would be removed from company leadership and would never regain control.
It was Standard General that reached out to Charney after his June termination and promised to help him get back his job and control of the company, the lawsuit said. Instead, the suit said, Standard General “fraudulently induced” him into giving the hedge fund control over his shares and “reneged” on its word.
The lawsuit said that Standard General never intended to help Charney because its investors wouldn’t tolerate such a relationship. The suit recounted an early-morning “emergency” meeting on June 30, 2014, in New York’s Central Park between Charney and Standard General Chief Executive Soohyung Kim.
And so it goes, a lawsuit that has plenty of steam yet to emerge it would seem.
Read more at LA Times
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