Ousted American Apparel founder and CEO Dov Charney is persistently pursuing damages for what he’s dubbed his “wrongful termination” last December, despite the company acquiring a temporary restraining order to prevent him from making negative statements to third parties.
In a complaint filed Friday in Los Angeles Superior Court, Charney hit his former company and ex-board director David Danziger with a new defamation lawsuit, alleging they vilified him to prevent him from collecting the necessary votes to regain rule of American Apparel, and is seeking more than $30 million in reparations.
Charney, who founded the Los Angeles-based company in 1998 with a $10,000 loan from his father, was fired from his position as chief executive in June 2014 following a series of sexual harassment claims made by past employees. He served as a consultant until December when he was dismissed for “cause.”
Danziger, meanwhile, resigned from the board on June 14.
Charney’s latest lawsuit stems from Danziger’s discovery last June that the discredited founder had aligned himself with FiveT Capital, once the retailer’s largest outside shareholder, in his quest to be reinstated as CEO. According to Friday’s filing, Danziger and others at the company then disparaged Charney by telling FiveT that he had engaged in criminal activity, which ultimately led to the Swiss firm withdrawing its support and cutting its stake by about 79 percent shortly thereafter.
“The acts upon which this lawsuit are premised highlight just some of the premeditated and deliberate acts that the board members of American Apparel engaged in to kick Charney out of the company he founded and grew to international prominence,” the complaint said.
It’s the third defamation lawsuit Charney has filed of late. Last month, he sued the company and chair Colleen Brown as well as New York-based hedge fund Standard General for “falsely stating” that he was fired for misconduct. American Apparel then counter-sued Charney for violating his standstill agreement.
Legal battles aren’t the only problems the retailer has on its plate. Sales slumped 9 percent in the first quarter amid CEO Paula Schneider’s attempts to de-sleaze the company’s image.