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Tuesday, Mar 21, 2023

Charney: ‘No Shot’ for Fair Chance to Buy Company

American Apparel’s ousted chief executive Dov Charney lashed against the clothing company’s board and investors in Bankruptcy Court on Thursday, claiming they had thwarted his numerous efforts to return to the company.

“It was very hard to get past a board that was completely faithless,” Charney told the judge, according to Bloomberg. “There was no chance I could ever have a fair shot at bidding.”

The board fired Charney in 2014 for misconduct but now the controversial executive is eyeing American Apparel’s bankruptcy as his chance to regain control. A $300 million takeover plan led by Hagan Capital Group would put Charney back at the helm. But American Apparel’s board rejected that offer last week and has put its own reorganization plan in front of Judge Brendan Shannon, who heard testimony Wednesday and Thursday. He may approve or deny the proposal as soon as Monday, said an American Apparel spokeswoman.

American Apparel chief executive Paula Schneider told the judge on Wednesday that “affiliation with Dov Charney was not a problem” for the company, according to Reuters. Instead, she said lenders had objected to the buyout proposal from the Charney group.

Charney, wearing his customary gray suit and white sneakers, gave an animated testimony on Thursday about his contributions to the clothier known for its colorful cotton t-shirts and racy ads.

“I felt that I was doing something that was creative. If it was unorthodox, it was meant to be,” he said, according to the Los Angeles Times. “I’m a merchant, I’m a creative artist, I’m a photographer, I’m a marketer, I’m an industrialist.”

The company’s attorneys said they would not cross-examine Charney because they doubted the relevancy of his commentary, the New York Times reported.

Bloomberg reported that Chad Hagan, managing partner of Hagan Capital, told the judge on Thursday that an uncooperative American Apparel board had tried to scare him from making a bid. He had previously told the Business Journal that he intended to restore Charney’s leadership.

“Dov created that company, moved it from a room to a small business to a midmarket business and finally a public company,” Hagan said. “We plan to bring him back in a co-CEO position so he can continue to do what he did best, which was to be a merchant.”

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