American Apparel Board Says It Has Concrete Facts on Former CEO’s Misconduct; Dov Charney Hires Lawyer to Fight Ouster
By Vittorio Hernandez | June 23, 2014 8:36 AM EST
The ouster of former American Apparel Dov Charney is far from over. Charney hired a lawyer to battle his removal from the company he established in 1998 and grew.
However, the board, which kicked out Charney, insisted it has concrete facts to support the removal of their CEO, reports CNN.
Allan Mayer, American Apparel board member, said that the board learned in the earlier part of 2014 of disturbing information that was suggestive of misconduct by the CEO. He could be referring to the video that showed Charney dancing naked in front of two female employees that was posted in a video sharing site.
The evidence they have on hand appears to be the last straw for the board which had previously sided with their CEO in several sexual harassment complaints against Charney filed by female employees over the years.
Mayer said the concrete facts that the board held resulted in an internal probe and the board's decision to kick their CEO out.
Australian Financial Review reported that the international investigation discovered Charney misused American Apparel funds and permitted an employee to post nude photos on the Internet of an ex-female worker, Irene Morales, who sued the former CEO. Morales sued Charney in 2011 for allegedly forcing her to do sexual acts on the CEO for several months.
The board also found that Charney used the company's money to buy plane tickets for his parents and he and his friends used the American Apparel apartments even if not for official purpose.
But Charney is not taking things as it is. He hired Patricia Glaser as his lawyer to represent him in a legal battle. CNN said that Charney was offered two choices - for him to quit the company quietly and he would still enjoy a salary of $1 million a year or be fired for a cause if he doesn't resign.
In her letter to the board, Glaser said, "By presenting Mr Charney with this absurd and unreasonable demand, the Company acted in a manner that was not merely unconscionable but illegal," probably referring to the two options.
She demanded a meeting with the board not later than on Monday, June 23, the start the process of Charney's return to his old post which would restore his business reputation as well.
But Mayer said that Charney's reputation had hurt American Apparel, adding, "Since we announced the decision, we've been contacted by mainstream, top of the line institutions that have not been interested in supporting us."
Over the years, American Apparel's shareprice has gone down to less than $1 from $15 in 2007.
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