Ex-American Apparel CEO increases stake
NEW YORK – Ousted American Apparel CEO Dov Charney has increased his stake in the clothing chain to nearly 43 percent as he fights to keep control of the company he founded in 1998. Charney was able to increase his stake through a partnership with financial firm Standard General, which is loaning him the money. But the board is scrambling to make its own moves to keep him out.
Legal experts say the dispute will likely end up in the courts at a tough time for the Los Angeles-based company, which has lost money since 2010. The company, which made its name with American-made goods and provocative advertising, is in a cash squeeze. “This is going to move from the boardroom to the courtroom,” said Jerry Reisman, a partner at Reisman, Peirez, Reisman Capobianco, a law firm based in New York. “Hopefully, it won’t undermine the company. This company is very fragile.”