American Apparel said to get arbitration notice after ousting CEO
NEW YORK American Apparel Inc., which ousted Chief Executive Officer Dov Charney last week, has received notice that its former CEO is seeking arbitration to resolve the matter, a person with knowledge of the situation said.
The American Arbitration Association notified the retail chain’s attorney Thursday morning, according to the person, who asked not to be identified because the information is private. Patricia Glaser, Charney’s lawyer, had warned American Apparel in a letter last week that she would take legal action if the company’s board refused to meet about reinstating him as CEO. The board denied the request, according to the person.
The arbitration is the next step in a weeklong standoff, which began when the controversial CEO refused to resign on June 18.http://www.nfljerseys4wholesale.com
cheap nfl jerseys The board then suspended Charney, saying it would fire him after a contractual 30 day waiting period. The company investigated Charney’s actions this year and found a history of misconduct that ranged from sexual harassment and retaliation to misallocation of corporate funds, the person said.
American Apparel also has racked up about $270 million in net losses since the beginning of 2010 and seen its stock price plunge below $1. The shares have lost almost two thirds of their value over the past year, leaving the retailer with a market valuation of less than $125 million.
In her letter on June 19, Glaser said Charney’s abrupt ouster from the company he founded was illegal and violated his contract. She also accused American Apparel of undertaking a publicity campaign to destroy his reputation.
Charney declined to comment on the arbitration filing. Glaser who has represented entertainers and other public figures, including Paula Deen and Miley Cyrus didn’t respond to a request for comment.
In 2011, a woman sued Charney, saying that he sexually assaulted her after she came to his house for a job interview. That same year, a second woman filed a complaint saying he retaliated against her for a previous lawsuit by leaking nude pictures of her and sexually explicit emails to the New York Post and the Los Angeles Times. At the time, a California judge agreed with the company that the claims should be resolved through arbitration rather than a trial.
Misuse of money and corporate assets alone wouldn’t have been enough to dismiss Charney, the person said. When added to other findings such as retaliation, the board had no choice, according to the person.