Founder Dov Charney moves to reassert control of American Apparel
Ousted CEO says he now owns nearly 43 per cent of retailer
Ousted American Apparel CEO Dov Charney has increased his stake in the clothing chain to nearly 43 per cent, setting the stage for a showdown with the board of the clothing company..
In a regulatory filing, Montreal-born Charney reports he now owns 74.6 million shares. Previously, his stake was 27 per cent.
Charney also sent a letter last week to the board seeking a meeting of stockholders on Sept. 25 for the purpose of expanding the board to 15 members, according to the filing.
He has been trying to remake the board that ousted him since being let go June 18, over allegations of inappropriate conduct.
The company said in a regulatory filing late Monday that Charney's request for a meeting is "invalid" and "improper" due to the fact that he was suspended as CEO and relieved of all powers to act on the behalf of the company.
Charney has teamed up with a company called Standard General to help him buy stock of the company he founded, with Standard General willing to loan him money for a stake of at least 10 per cent.
American Apparel has been gearing up to fight just such a move, adopting a shareholder rights plan, commonly called a "poison pill," a day after a bid from Charney to increase his control.
“The rights plan is designed to limit the ability of any person or group, including Dov Charney, to seize control of the company without appropriately compensating all American Apparel stockholders,” the company said.
The retail chain, which started out selling U.S.-made T-shirts and became a byword for hip fashion, has racked up about $270 million in net losses since the beginning of 2010. Its stock has dropped 52 per cent in the past year as it lost its cachet among American teens.
With files from the Associated Press