American Apparel Says Charney Went ‘Too Far’

     (CN) – Obsessed with taking back American Apparel, ousted CEO Dov Charney has launched a “scorched earth campaign” against the hipster retailer, it claims in court.
     American Apparel’s May 15 lawsuit in Delaware Chancery Court is the latest in a string of lawsuits that the Los Angeles-based company and its erstwhile founder have traded.
     It has been nearly a year since the company suspended Charney amid persistent allegations that he sexually harassed employees and misused company funds.
     American Apparel says the removal triggered Charney’s obsession with taking back the company, and that it ultimately reached a “nomination, standstill and support agreement” with Charney to force his resignation from the board and open an investigation into his misconduct.
     The results of that investigation led to Charney’s termination with cause in December, according to the complaint.
     Though Charney’s “only connection to the company at this point is as a stockholder,” American Apparel says the 46-year-old’s “ongoing subversion of the company’s rebuilding efforts” violate the terms of their July standstill agreement.
     “Indeed, in an unprecedented effort to disrupt and harm the Company, Mr. Charney has launched a scorched earth campaign that exceeds all bounds of propriety,” the complaint states.
     American notes that the Charney sued it last week for $20 million suit on the heels of suing the retailer’s hedge-fund investor Standard General.
     On top of that, Charney has allegedly trespassed on its property, interfered with its business, and threatened to fire certain employees when he regains power.
     American Apparel says Charney also used a former college roommate and an ex-girlfriend to “do his bidding” and remove certain higher-ups in the company.
     They say also say his attorney, Keith Fink, has filed “no less than a dozen” bogus unfair labor lawsuits to get back at the company, and that Charney encouraged his former minions to hand out flyers and send emails to fight the current board members.
     He’s also called for the heads of certain board members, according to the lawsuit.
     “Mr. Chaney has gone too far, and the curtain has now been pulled back, revealing that he has clearly breached the unambiguous terms” of the standstill agreement, according to the complaint.
     The agreement stipulated that Chaney wouldn’t seek the removal of board members or disparage the company, according to the complaint.
     “Through his actions, however, Mr. Chaney continues to violate both the express terms of the spirit of the Standstill Agreement,” the lawsuit states.
     American Apparel notes that it has 239 stores with 10,000 employees in 20 countries.
     Charney’s attorney Fink has not returned a request for comment.
     American Apparel is represented by attorney Edward Micheletti with Skadden, Arps, Slate, Meagher & Flom in Wilmington.
     A spokeswoman for American Apparel declined to comment on the filing.

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