Dov Charney isn’t going away.
In fact, the ousted ceo and founder of Los Angeles-based American Apparel, stood outside the clothing company’s factory and offices in downtown Friday afternoon where workers began gathering around noon for a march to city hall.
The agenda was two-fold: immigration reform along with a public shaming of New York hedge fund Standard General. Many in the crowd wore T-shirts printed—on American Apparel blanks—with “Save our company!”
Standard General not only struck a deal with Charney to loan him money to buy shares of American Apparel from Standard General but also later loaned money to the company that led to a reconstitution of the board. A series of twists and turns followed, but Charney was ultimately fired late last year at which time Paula Schneider was named to lead the company.
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A lawsuit filed by a company shareholder this week in the Delaware Court of Chancery alleges Standard General is now holding the company captive. The lawsuit, filed by Eliana Gil Rodriguez, is seeking class action status and not only takes aim at the hedge fund but some former and current board members.
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The complaint alleges shareholders were misled into re-electing a slate of directors that had already planned to fire Charney upon their election. The lawsuit also said the board failed to take into consideration purchase offers made by private equity firm Irving Place Capital.
A spokesperson from Standard General said:”The allegations in this lawsuit are without merit, and we are confident that we will prevail in this nuisance action.”
The complaint follows two others filed in recent weeks. A lawsuit from three former employees seeks class action status in a matter relating to recent layoffs at the company. There’s another lawsuit from David Nisenbaum, former American Apparel director of manufacturing accounting analysis and audit, who alleges in his complaint he was fired from the company as retaliation for issues he pointed out to management at the time related to former chief financial officer John Luttrell.
“Dov Charney, Dov Charney’s lawyer and other people related to Dov Charney continue to bring claims that are wrong on the facts and wrong on the law,” an American Apparel spokesperson said. “Each of these claims is rooted in the exact same agenda. These meritless claims serve as public relations opportunities now, but they will each will fail the test when put before a judge. American Apparel’s new management is focused on restoring the financial health of the company and does not intend to waste time addressing each of these meritless claims in the court of public opinion. We are confident we will succeed on every one of these in the proper venue.”