Judge Tells Charney to Pipe Down

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Dov Charney, the founder and ousted chief executive to American Apparel Inc., has been told by a Delaware judge to stop his public attacks on the company.

Chancellor Andre Bouchard of the Court of Chancery, which settles business matters for companies incorporated in the state, issued a temporary restraining order requiring Charney to abide by the standstill agreement he signed in July 2014 with the company and its lenders, New York hedge fund Standard General. As a result, Charney cannot directly or indirectly seek the removal of any board member or instigate or help any third party in its attempt to do so.

The order also stops Charney from making any verbal or written negative public statements about past or current American Apparel, its employees, directors or officers ahead of the company’s July 18 annual meeting.

“Mr. Charney intends to fully comply with the court’s order and appreciates the prompt attention the Delaware Court of Chancery has given to this case,” said Stephen Brauerman, Charney’s lawyer in the matter.

Brauerman said he didn’t believe the order would impact the litigation Charney has ongoing with American Apparel. Charney has sued American Apparel for defamation and is involved in an arbitration regarding to his employment with the company.

American Apparel responded last month with a suit alleging Charney was refusing to follow terms of the standstill agreement he signed in July 2014. Its suit says “Mr. Charney has become obsessed with retribution against the Company and has made it his mission to ‘take back the Company’ and alleges he is launching a legal campaign against the company and attempting to manipulate its labor force, which, in part, is undergoing a drive to unionize in an attempt to get an employment contract with the company.

American Apparel’s lawyer, Edward Micheletti, of Skadden Arps Slate Meagher & Flom’s Wilmington, Del., office did not return a call for comment in time for publication.

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