LOS ANGELES (CN) – American Apparel founder Dov Charney has sued an investment firm for $30 million, claiming his termination from the clothing retailer’s board was based on a bogus investigation and false claims.
Charney, 46, sued the New York firm Standard General in state court on Thursday, alleging defamation, false light, intentional interference with actual and prospective economic relations, unfair business acts and false advertising.
Charney has been the subject of highly publicized claims that he misused corporate assets, abused his executive position and sexually harassed employees.
But according to the Canadian businessman, Standard General released false public statements that he had been ousted as chairman and CEO of American Apparel in June 2014 because of the results of an independent investigation into his conduct.
“Nothing could be further from the truth,” Charney’s 21-page complaint states. “In reality, the Standard General-controlled American Apparel board of directors paid millions of dollars of the cash-strapped company’s funds to American Apparel’s outside general counsel Jones Day to manufacture various ex post facto excuses for the board’s termination of Charney.”
Charney adds that “most egregiously,” the board threatened to ruin him and “destroy his character” if he did not resign and sign over voting rights to his American Apparel stock. He claims that in return, the board offered him a multimillion dollar position as a consultant.
He seeks a minimum of $10 million in general and compensatory damages, and at least $20 million in punitive damages.
Standard Master General Fund and Standard General Ltd. are also parties to the complaint.
Charney is represented by Keith Fink and Olaf Muller of Fink & Steinberg.
In statements emailed to Courthouse News by Arielle Patrick of public relations firm Weber Shandwick, an unidentified Standard General representative said Charney had filed “frivolous, meritless lawsuits at a breakneck pace.”
“The facts speak for themselves, and we are confident that Mr. Charney will be held accountable for this knowing, intentional abuse of the legal system,” the representative said.
An American Apparel representative also said Charney’s claims would fail.
“These meritless claims serve as public relations opportunities now, but they will each fail the test when put before a judge,” the representative said.
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