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Not Plain Jane's Avatar
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American Apparel Ousts Dov Charney as CEO
American Apparel ousts Dov Charney 'for cause,' cites misconduct investigation

June 18, 2014, 8:59 p.m.

Dov Charney, the controversial chairman of American Apparel, was ousted Wednesday by the company's board of directors, which said the action "grew out of an ongoing investigation into alleged misconduct."

The board voted to replace Charney as chairman and "notified him of its intent to terminate his employment as president and CEO for cause," according to a statement.

The action suspends Charney immediately. Under the terms of his employment, a 30-day period is required before termination, according to the statement. The board acknowledged that the management changes may trigger "an event of default under its credit agreements" and said it will seek a waiver from lenders.

Allan Mayer and David Danziger were appointed by the board as co-chairmen.

“We take no joy in this, but the board felt it was the right thing to do,” Mayer said in the statement. “Dov Charney created American Apparel, but the company has grown much larger than any one individual and we are confident that its greatest days are still ahead.”

When reached by phone by a Times reporter, Charney hung up.

Charney, 45, was born in Montreal and began making basic T-shirts under the American Apparel name in 1991. His company gained momentum in 1997 with his design of the Classic Girl line, which is when he moved the business to Los Angeles.

He was the founder and CEO of American Apparel, which began as a wholesale brand and expanded in 2003 into the retail market.

He has battled repeated accusations of sexual harassment in recent years and had been publicly backed by the company.

In 2011, American Apparel lashed out when four female former employees filed a sexual harassment suit. At the time, the company told The Times that the four women were friends who were colluding to "shake down" Charney and the company for money and that it had "voluminous evidence" to prove that the allegations were false.

In 2012, Charney was accused in a wrongful termination suit of choking and rubbing dirt in the face of a former store manager in Malibu. Charney also was accused of calling the employee "a wannabe Jew" and a "fag" and asked if he was sleeping with a certain girl. The company denied the allegations.

He has also become a well-known advocate for the Made in the U.S.A. movement and for immigration reform. American Apparel’s clothing is manufactured out of a factory in downtown Los Angeles, and he has emphasized that the company is "sweatshop-free."

Still, in recent years, the company has had to remove a third of its workforce after employees were found without required documentation. And its ads, some shot by Charney, have raised eyebrows or racy themes in public locations.

This year American Apparel has fought to retain its listing on the New York Stock Exchange while buried in negotiations over financing -- efforts that the retailer said would force it to file its annual report late.

According to the release regarding Charney's ouster, American Apparel has about 10,000 employees and retail stores in 20 countries.

Board members said Wednesday that they planned to work with a search firm to identify a permanent chief executive.

Terry Fahn, a spokesman retained by American Apparel, declined to comment beyond the details in the press release.

Times staff writer Megan Garvey contributed to this report
L.A. Times

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daniellat's Avatar
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Best news I've heard in years, but tbh it must suck getting fired from the very same company you created.

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Yep, it's weird. But it sounds like he dug his own grave over the years.

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see ya...
wouldn't wanna be ya...

it is about time...
i have heard stories about him first hand from former staff...
that perv has been asking for it for YEARS...
good riddance...
i hope he burns...

"It is not money that makes you well dressed: it is understanding."

Last edited by softgrey; 19-06-2014 at 11:45 AM.
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Well... it's about time that Charney got booted from the company! His behavior is disgraceful and was really bringing the company down. Hopefully American Apparel can move on from this and can continue to do better business.

__________________ "It is ever so much easier to be good if your clothes are fashionable." Anne of Green Gables by L.M. Montgomery
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FINALLY. It is good to see justice done.

Terry next please

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More details on his firing, not shocked that his general creepiness (which we have heard about time and time again) is partially to blame:

American Apparel Ousts Its Founder, Dov Charney, Over Nude Photos

The founder and chief executive of American Apparel, Dov Charney, was fired this week because an internal investigation found that he had misused company money and had allowed an employee to post naked photographs of a former female employee who had sued him, according to a person with knowledge of the investigation.

The board offered Mr. Charney the opportunity to remain at the company as a consultant in a creative role, so long as he resigned as chief executive, said two people with knowledge of the situation, who spoke on condition of anonymity, and a news release had already been written that mentioned an amicable, voluntary parting.

He was told he had to make his decision that day. If he stayed on, he would be paid about $4 million, the person said. If he refused to step down, he was told he would be fired. Mr. Charney refused.

The company’s board learned early this year that Mr. Charney had known of an employee’s plans to publish naked photographs of a former American Apparel worker, Irene Morales, on the Internet. While Mr. Charney did not publish the photographs himself, he did not try to stop them from being published, said the person with knowledge of the investigation, who spoke on condition of anonymity because of the sensitive nature of Mr. Charney’s dismissal. Ms. Morales sued Mr. Charney in 2011, claiming he had forced her to perform sexual acts over a period of several months. He claimed that the photos showed that she had pursued him.

In March, after learning that Mr. Charney was aware of plans to publish the photographs, the board decided to conduct an investigation into his behavior.

The investigation, led by the law firm Jones Day, also found that Mr. Charney had used the retailer’s resources for his personal use. According to the investigation, he arranged flights for his parents with company money, and he and his friends used company apartments while not on official business.

A person close to Mr. Charney said that his use of company money and apartments had been appropriate. The person also insisted that because Mr. Charney had not created the blog on which the photographs were posted, he should not be held responsible for its content.

This person added that Mr. Charney had told board members of plans to distribute the photographs. But the person with knowledge of the investigation disputed this, saying that board members did not know that the pictures would be posted online.

For years, Mr. Charney has been trailed by accusations of sexual harassment and stories about his behavior that, at a minimum, seemed like a lurid distraction for the chief executive of a publicly traded company. He was sued by employees who said he had created an unsafe work environment rife with innuendo and sexual misconduct.

But the problems at American Apparel, which Mr. Charney founded in 1998, extended beyond his personal behavior.

The company’s stock has plummeted about 80 percent in the last five years. Several financial institutions refused to work with American Apparel while Mr. Charney was involved with the company. And companies that provided financing demanded credit-card-style interest rates of up to 20 percent.

On Wednesday, just after the company’s annual meeting, Mr. Charney sat in a conference room at the Times Square offices of the company’s outside counsel, Skadden, Arps, Slate, Meagher & Flom, and was fired by the board. Under the terms of his contract, Mr. Charney will be suspended immediately and formally terminated after 30 days. The directors also voted to remove him as chairman. Mr. Charney still owns 27 percent of the company’s stock.

A person with direct knowledge of the meeting said that Mr. Charney was shocked and that the meeting lasted more than nine hours.

The company has since received a letter from Mr. Charney’s lawyers saying he believes the termination to be unjustified and illegal, and demanding that he be restored to his position at the company’s helm.

“The board’s actions have done a tremendous disservice to the company, as well as causing substantial professional, reputational and financial injuries to Mr. Charney,” the letter said.

The ouster of Mr. Charney may set off a default on some of the company’s credit lines, and the company has been in discussions to hire the Peter J. Solomon Company, an investment firm, to provide it with additional capital. A person with knowledge of these discussions denied that there were any plans to put the company up for sale.


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dazed&confused facebook.
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Absolutely !

About Terry, not easy apparently...

Originally Posted by fashionista-ta View Post
FINALLY. It is good to see justice done.

Terry next please

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