Business

American Apparel Founder Says He’s Down To His Last $100,000

Ousted CEO Dov Charney told Bloomberg News that he’s been living on the Lower East Side on a friend’s couch. He also plans to “sue everyone,” as per the report. Updated with comment from Standard General.

Bloomberg Television / Via bloomberg.com

American Apparel founder Dov Charney, who was booted from the company last week, says he’s down to his last $100,000, according to an interview with Bloomberg News.

The ousted executive told Bloomberg reporter Trish Regan that he’s living on a friend’s couch on New York’s Lower East Side, aiming to muster support to take his company private, she said on Bloomberg Television today. Regan was reporting on a conversation she had with Charney last Thursday afternoon which was not televised.

Charney, who pledged 43% of his stake in the company to hedge fund Standard General this summer during an internal investigation, is apparently “very upset” at the firm and has accused them of conspiring with a board member to oust him, she said.

She quoted Charney as saying: “I gave them my entire life’s work and they agreed to put me back in, but instead they used this investigation to fire me. They betrayed me. I gave them my heart. My shares. They teamed up with Allan and worked against me.” (Charney was referring to Allan Mayer, former co-chair of the board.)

The hedge fund, in an e-mailed statement, responded to Charney’s accusation, saying: “As we have stated previously, our objective is to help American Apparel grow and succeed.”

“We supported the independent, third-party and very thorough investigation into the allegations against Mr. Charney, and respect the board of director’s decision to terminate him based on the results of that investigation,” a Standard General spokesperson said in the e-mail. “We believe that American Apparel will benefit from the leadership of its new CEO, Paula Schneider, and we are focused on supporting her and American Apparel going forward.”

“He would like to see this company taken private,” Regan said of Charney. “He’s suing everyone, by the way.”

American Apparel fired Charney last Tuesday and named his successor, retail veteran Paula Schneider. Charney was working as a paid consultant for the company during an internal investigation that began in July; he was suspended as CEO and chairman for “alleged misconduct and violations of company policy” in June.

It’s unclear how Charney is down to his last $100,000, given he was still earning his base CEO salary of around $800,000 in the consultant role. He is technically still the company’s biggest shareholder.

A group of at least 30 executives wrote a letter to the board hours after Charney’s dismissal last week, urging the company to bring him back in some leadership capacity. They wrote that he “makes this thing tick.”

Charney was served with a termination letter in June for a long list of reasons including breaching his fiduciary duty, violating company policy, sexual harassment, and misusing corporate assets, according to the letter, which was obtained by BuzzFeed News. In news reports following his dismissal, Charney proclaimed his innocence and called the board’s accusations baseless.

update

Updates with comment from hedge fund Standard General in fifth paragraph.

Check out more articles on BuzzFeed.com!

 
 

More News

More News

Now Buzzing