American Apparel founder Dov Charney is speaking out against a hedge fund he says betrayed him and forced him out of the retail brand.
“They robbed me,” Charney told Trish Regan at Bloomberg TV in an off-camera interview.
Charney got a loan from Standard General in July so he could boost his ownership of American Apparel to 43% after he was fired as CEO in June.
He gave up his voting rights to the firm as collateral for the loan, and since then, Standard General has pushed American Apparel to replace most members of its board.
Charney claims that when he pledged his stake to Standard General, the firm promised to give him back his position, “not necessarily as CEO but that he would effectively running the company” once an internal investigation against him was completed, Regan said.
But Standard General ended up using the deal to push him out of the company, Charney alleges.
Regan quoted Charney as saying, “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. They betrayed me. I gave them my heart. My shares. They teamed up with Allan [Mayer, co-chairman of American Apparel’s board] and worked against me.”
American Apparel initially fired Charney as CEO because of “concerns about his trustworthiness” and allegations of sexual misconduct, the Wall Street Journal reported. An investigation followed and Charney remained in a consulting role at the company until last week, when he was officially terminated.
Responding to the allegations, a Standard General spokesperson said, “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.”
Meanwhile, Charney says he is down to his last $US100,000 and sleeping on a friend’s couch in the Lower East Side neighbourhood of Manhattan, and he’s plotting a counteroffensive.
“He wants support to take his company private and to have a role there,” Regan said. “He’s suing everyone, by the way.”
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