Char­ney hit with tem­po­rary or­der

Los Angeles Times - - BUSINESS BEAT - By Shan Li shan.li@la­times.com

Amer­i­can Ap­parel Inc. was granted a tem­po­rary re­strain­ing or­der to pre­vent Dov Char­ney, its ousted chair­man and chief ex­ec­u­tive, from crit­i­ciz­ing the com­pany or seek­ing to re­move its board mem­bers.

Char­ney must fol­low the man­dates of a deal reached with Amer­i­can Ap­parel last year in which he agreed to re­frain from dis­parag­ing the com­pany and its em­ploy­ees, or seek­ing to re­place di­rec­tors ahead of the an­nual meet­ing July 18, ac­cord­ing to a fil­ing in Delaware Chancery Court.

The board re­moved Char­ney as chair­man and suspended him as CEO last June, cit­ing ev­i­dence of in­ap­pro­pri­ate be­hav­ior with em­ploy­ees and mis­use of com­pany funds.

Af­ter be­ing suspended as CEO, Char­ney teamed up with hedge fund Stan­dard Gen­eral to buy ad­di­tional shares as he at­tempted a come­back.

As part of the stand­still deal reached with both com­pa­nies, Char­ney stepped down as a board mem­ber and agreed to a num­ber of other re­stric­tions, in­clud­ing not dis­parag­ing Amer­i­can Ap­parel.

But his come­back at­tempt failed, and he was fired as CEO in De­cem­ber.

Char­ney and his al­lies have filed a f lurry of legal ac­tions in re­cent months, in­clud­ing defama­tion law­suits against Amer­i­can Ap­parel and Stan­dard Gen­eral.

Amer­i­can Ap­parel filed suits of its own, ac­cus­ing Char­ney of run­ning a “scorched earth cam­paign” to re­gain con­trol.

Stephen Brauer­man, a lawyer for Char­ney, said his client in­tends to com­ply with the court or­der. The “or­der is pre­lim­i­nary and based on plead­ing we have not had an op­por­tu­nity to fully chal­lenge,” he wrote in a state­ment. “We do not be­lieve this de­ci­sion has any ef­fect on the other lit­i­ga­tion he has filed against the com­pany.”

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