Embattled American Apparel Inc. founder Dov Charney is moving to take more control of the company that is pushing him out.
Mr. Charney, ousted as chairman last week, has struck a deal with a New York-based financial firm to buy 10 per cent more of the stock, according to a regulatory filing on Friday. He currently owns 27.2 per cent of the stock; the purchase, if completed, would boost his holding to 37.2 per cent.
According to the filing, Standard General LP, which specializes in companies “undergoing dramatic change,” plans to buy at least 10 per cent of the troubled fashion retailer’s shares. It will then lend the Montreal-born Mr. Charney money to buy SG’s stock. Interest on the loan is pegged at 10 per cent.
In addition, the filing noted that Mr. Charney “intends to evaluate various alternatives” with respect to American Apparel, suggesting that he might push for changes to the board of directors.
His latest initiatives raised the ante in the battle at the Los Angeles-based retailer, which is struggling to turn around its fortunes amid the boardroom brawl. The board removed him as chairman and suspended him as chief executive officer, with 30 days for the move to become permanent.
The board’s decision came as a result of an investigation into alleged misconduct. The probe is focusing on allegations that Mr. Charney attempted to discredit women who had accused him of sexual harassment, and that he spent company money on personal matters, sources say. Now the colourful and controversial Mr. Charney is fighting back.