“I’m not going away,” insists Dov Charney, the ousted chief executive of American Apparel who saw the clothier slip out of his grasp in bankruptcy court last week.
Vowing to stay in the public eye, he told the Business Journal, “I can’t just be robbed like this and turn away.”
In fact, the 46-year-old entrepreneur could make a fresh mark as the creative force behind a new company, said Chad Hagan of Roswell, Ga.’s Hagan Capital Group, whose $300 million takeover bid for American Apparel was rejected by the company in bankruptcy proceedings.
“He’s going to come back with a fury,” Hagan said. “We’re not wanting to replicate American Apparel. We’re wanting to beat American Apparel.”
But Charney declined to discuss the prospect of launching another company.
“I have no comment on what I’m planning to do,” he said, stressing his deep disappointment in losing the company that prided itself on L.A. manufacturing and social activism. Ever since American Apparel fired Charney in 2014 for alleged misconduct, he has battled fiercely to regain control.
In bankruptcy court recently, he told a judge that the company’s new management thwarted his multiple attempts to return to the business he founded 25 years ago.
“There was no chance I could ever have a fair shot,” Charney said in reportedly animated testimony, wearing a gray suit and white sneakers. “I’m a merchant, I’m a creative artist, I’m a photographer, I’m a marketer, I’m an industrialist.”
Judge Brandon Shannon appeared sympathetic to Charney’s devotion to the brand, but said the allegations of his wrongful firing did not factor into selecting the best way for American Apparel to exit bankruptcy, which it entered in October amid weak sales and heavy debt.
“I have no doubt that he wants only the best for American Apparel and especially for its thousands of employees,” Shannon said.
American Apparel’s reorganization will take the company private, wiping out the stock and leaving shareholders, including Charney, empty-handed.
Charney said he would not appeal.
According to bankruptcy attorney David Kupetz of downtown’s SulmeyerKupetz, an appeal would have little chance of succeeding since American Apparel’s major stakeholders had already vouched full support of the company’s plan to exit Chapter 11. Plus, stalling the restructuring plan would require Charney to post a bond worth millions of dollars to cover possible harm to the business.
Charney will have more days in court, however, both pursuing and fighting off lawsuits involving American Apparel. In a suit filed in June, he accused company officials and hedge fund New York’s Standard General of forcing him out of the company and reportedly sought $100 million in damages.
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