American Apparel board rejects demand to meet Charney: source
By Nadia Damouni and Jeffrey Dastin
(Reuters) - The independent directors of maverick retailer American Apparel Inc APP.A have rejected a demand to meet and reinstate ousted CEO Dov Charney on Monday, a source close to the matter said.
The board last week stripped Charney of his titles of chief executive, chairman and president. Initially known for insisting on manufacturing clothing in the United States, Charney eventually became notorious for conduct like attending meetings in his underwear.
American Apparel's board cited Charney's alleged misuse of company funds and role in disseminating nude photos of an ex-employee who had sued him.
Charney's lawyer demanded a meeting on Monday, and the board's refusal to meet with and reinstate him makes a legal battle with the ex-CEO, who still controls 27 percent of the company's stock, more likely.
In the letter to the board, sent on Thursday, lawyer Patricia Glaser said the company had failed to give Charney 21 days’ notice of his severance package as required by law, making his dismissal “not only unconscionable but illegal.”
A link to the letter, whose receipt the source familiar with the matter confirmed, was provided in an article on the Wall Street Journal's website.
The letter threatened legal action should 45-year-old Charney not regain his executive positions.
The board sees no point in meeting with Charney at this time, the person close to the matter said. Continued...