Founder argues for control of American Apparel
Dov Charney, the colorful ousted founder of American Apparel, made a last-ditch effort to wrest back control of the company on Thursday, accusing former partners of stealing away his multimilliondollar empire and declaring that his new alliance with investors was the only way to save it.
“There was a plan behind the scenes to steal the company from me,” Charney testified in bankruptcy court in Delaware. “Since then, it’s been a constant hide-the-ball.”
“I’m a merchant, I’m a creative artist, I’m a photographer, I’m a marketer, I’m an industrialist,” Charney said, adding: “I don’t want to hand over my company. This is coercion.”
After two days of testimony from various witnesses and in the face of an impending snowstorm, Judge Brendan Shannon said that he would postpone his ruling on American Apparel’s bankruptcy until Monday. But he could still decide to extend proceedings or postpone the retailer’s exit from bankruptcy.
“I recognize that there is not consensus in the room,” the judge said, referring to the plans between the investors backing Charney, and the company and its creditors who oppose the proposal.
American Apparel’s board fired Charney in 2014 from the company he founded decades earlier, accusing him of misusing funds and of allowing an employee to post naked photographs of a former female worker, accusations Charney has denied. The retailer filed a petition for Chapter 11 bankruptcy protection in October.
But a new alliance between Charney and the investment funds Hagan Capital Group and Silver Creek Capital — which have offered to buy American Apparel and rehire its founder — has brought Charney back into the fray.