Dov Charney's Exile From American Apparel Lasted Less Than a Month
Notoriously skeevy American Apparel founder Dov Charney was fired in mid-June for a long list of reasons, including allegedly misusing company funds, engaging in and covering up sexual harassment, and leaking nude photos of the woman who claims she was his sex slave. But the Charney-American Apparel breakup apparently didn't stick—the company is bringing him back as a consultant.
In the wake of his firing, Charney's attorney claimed the company's investigation was illegitimate and threatened to sue unless he was reinstated. Now the two parties have reportedly reached an agreement: Charney and four other members of the seven-person board will step down while an independent committee investigates Charney's conduct.
He'll be employed as a "strategic consultant" on a contract basis during the investigation, keeping the same base salary. Charney previously turned down the position, which he was offered in exchange for resigning as CEO.
Charney has now turned over his stake in American Apparel to New York hedge fund Standard General, which bailed the company out with $25 million in capital that will keep it from defaulting on its debts. In exchange, Standard will get some amount of debt or preferred stock and be allowed to name 3 new directors.
Charney and Standard control a combined 44 percent of American Apparel, but they've reached a standstill agreement that blocks either of them from buying additional stock until Charney's investigation is complete.
