Fired American Apparel founder Dov Charney wants $25m if he isn't reinstated

Former boss lashes out at 'hateful' board and claims he's the 'best man' for the job, despite shares falling to less than $1 under his watch.

by Rachel Savage
Last Updated: 24 Jun 2014

There were plenty of reasons American Apparel founder and former chief exec Dov Charney had to go. Aside from the repeated allegations of sexual harassment against him, he brought the controversial clothing company to brink of bankruptcy in 2011 and shares were just 64 cents (38p) when he was fired last week.

Charney is not about to go down without a fight though and has lodged a complaint with US authorities contesting his dismissal. If he isn’t reinstated, he claims he could be in line for a payout of between $23m and $25m. But the highly weird interview with the FT just proves Charney has veered from the sublime to the utterly ridiculous.

‘I believe the allegations made against me in my termination letter to be entirely false,’ he told the FT. ‘I think it’s highly unusual that a board – any board – would indulge in such a hateful PR campaign against its founder. I think it’s grotesque.’

He also brushed off the sex assault allegations, saying, ‘It’s sad to me that the board are invoking sexual shame in a false way to advance their agenda. Its almost like mocking someone’s sexual orientation in order to advance themselves.’

Despite a $5.5m net loss and 7% drop in like-for-like sales in the first quarter of this year, Charney claimed he was the man to turn around the company, setting out his plans to cut inventory and ‘drive up sales’.

‘This is the year American Apparel fully recovered. This has to manifest itself to its full conclusion, with me there,’ Charney said. ‘I think I will be back in my office before long.’

American Apparel wasn’t having any of it, though, with co-chair Allan Mayer claiming it didn’t terminate the contract without cause and, if it had, Charney wouldn’t be in line for such a huge payout.

‘Like most great entrepreneurs, Dov is a dreamer,’ Mayer said – a backhanded compliment if there ever was one.

Charney is nothing if not emotional anyway, crying while reading out text messages from workers sad to see him go. He also spontaneously took the interviewer to a ‘deeply unluxurious’ flat, complete with unmade beds, in an attempt to prove he wasn’t misusing company property, as he has been accused of. True or false, it’s not exactly businesslike behaviour.

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