Former American Apparel CEO Charney Ordered to Pay $19.5 Million
The Delaware Supreme court orders Dov Charney to pay $19.5 million to hedge fund Standard General.
WILMINGTON, Delaware-The Delaware Supreme court orders Dov Charney to pay $19.5 million to hedge fund Standard General. The payments stem from a loan from 2014 when the firm assisted Charney in his attempts to re-take American Apparel.
A news update by Retail Dive points out that the affirmation comes from a December 2017 ruling. Late last year, the Delaware Chancery Court ruled that any verbal agreements Charney had with the hedge fund did not supersede written agreements, says the publication. Charney’s verbal agreement said he would hand over additional shares of his former company he acquired with the loan from Standard General in exchange for reclaiming the position of CEO.
The update comes as the newest chapter in Charney and the hedge fund’s ongoing legal spat. The battle dates back to 2015, when Standard General launched an initial lawsuit against the former CEO, contesting that he was non-cooperative in their efforts to reposition him at the company. Since that time, Charney has also reentered the garment manufacturing and design world, with his new company, Los Angeles Apparel. The California-based basics maker employees a large number of American Apparel employees who originally worked at the company’s now-defunct Los Angeles factory.