It appears as though Dov Charney's days with American Apparel are officially over.
After listening to two days of arguments last week, a Delaware judge ruled today against American Apparel founder Dov Charney's attempts to regain control of the company, according to the Los Angeles Times. Instead, an alternative and board supported bondholder plan to restructure the company out of bankruptcy will move forward.
The bondholder plan, submitted when American Apparel filed for Chapter 11, essentially transforms $200 million of bonds into equity the company could use to move forward. More money from the bondholders would also be injected for the same purpose. Critically, the plan omits Charney from any part of the company's future.
Dov didn't like this, and instead argued for a $300 million plan led by the private equity firm Hagan Capital group, portraying himself as a poor businessman who is the victim of a mutinous board. Among other stipulations, the Hagan plan would reinstate Charney as the company's leader, citing his founding knowledge as crucial for the company's progress.
The Delaware judge rejected Charney's preferred plan, meaning it now looks like the company has permanently cleansed itself of its founder.
Charney was very unhappy when American Apparel filed for bankruptcy last October. Under the then proposed reorganization plan, backed by several hundred million dollars of privately held investment funding, Charney would be stripped of his authority of the company, and would immediately lose $8.2 million as he watched his publicly traded shares evaporate overnight.
This was simply unacceptable for the man who at one point allegedly found it appropriate to call his female employees "perfect cum targets." Charney took American Apparel's executives to court, where he argued for an alternative to their company reorganization plan that would kick him out permanently.
In June 2014, Charney was fired by the company's board for allegations of questionable behavior with employees, as well as alleged misuse of company funds. Among other issues, Charney allegedly leaked nude photos of a woman who claimed he kept her as a sex-slave, and was accused of sexually harassing potential new employees both via text message and in person.
A video—since seemingly erased from the Internet—also surfaced showing Dov dancing naked in front of two other employees.
Good luck, Dov. You don't have our sympathies.
