TIMELINE: Charney ousting from American Apparel - update
American Apparel is in an ongoing battle with the CEO it ousted, Dov Charney
As the ongoing battle between US retailer American Apparel and ousted CEO Dov Charney continues, just-style is posting a running update of the latest developments.
- 22 December 2014: American Apparel confirms it has received an indication of interest to acquire the company for $1.30 to $1.40 per share. The retailer also appoints Colleen Brown as chairperson, after Allan Mayer and David Danziger decided to step down as co-chairmen of the board.
- 21 December 2014: American Apparel adopts another 'poison pill' stockholder rights plan - its second this year, designed to strengthen the ability of the board to protect the company's shareholders.
- 17 December 2014: American Apparel appoints Paula Schneider as CEO, effective 5 January. She previously served as a senior executive at retail and clothing companies including Warnaco, Gores Group and BCBG Max Azria.
- 17 November 2014: Bigger Capital delivers a second letter to American Apparel's board expressing “serious and growing concerns” with the company, asking that the board be immediately reconstituted to replace David Danzinger and Allan Mayer with direct representatives of American Apparel's minority shareholders.
- 16 October 2014: American Apparel is to make a US$13m debt interest payment, according to Bloomberg, in the latest sign its finances are stabilising following founder/CEO Dov Charney's ousting.
- 13 October 2014: American Apparel is reported to be selling five UK stores, including its flagship store in Covent Garden, and stores in Bristol, Leeds, Liverpool, Nottingham. According to Property Week, the firm has appointed UK retail property specialist Kitchen La Frenais Morgan to manage the disposals.
- 28 August 2014: Private equity firm Lion Capital appoints Robert Mintz to its board, according to WSJ. He was most recently CEO of rib and barbecue supplier Rupari Food Services, and attended school with Charney.
- 24 July 2014: American Apparel appoints four new directors who will join its old board. This will take effect from 2 August. It excludes Charney and includes the retailer’s first female board member Colleen Brown. Other members include Joseph Magnacca, chief executive of RadioShack, Standard General partner David Glazek, and turnaround expert Thomas Sullivan.
- 23 July 2014: FTI Consulting is close to completing its investigation into Charney's conduct, Reuters reports. Its main task remaining will be to interview Charney. American Apparel is also expected to announce its new board of directors this week.
- 18 July 2014: Standard General is close to buying Lion Capital’s $10m loan to American Apparel, avoiding a potential default, sources told Bloomberg. The move could sidestep possible legal disputes.
- 18 July 2014: Shareholders Bigger Capital Fund, Bachelier, and the Bigger Family, demand the resignations of the two remaining board members, David Danziger And Allan Mayer, who have not been replaced. The shareholders claim the members are "directly responsible for the value erosion and reputational harm to the company and as a result have lost the confidence and support of the shareholders".
- 11 July 2014: American Apparel reportedly agreeds to a temporary truce with Charney, including re-hiring him as a "strategic consultant".
- 10 July 2014: American Apparel signs deal with Standard General providing the company with up to $25m in financing. As part of the deal, American Apparel's board will be reconstituted, and an independent board committee formed to oversee the investigation into Charney.
- 9 July 2014: American Apparel reportedly disputes a claim made by Lion Capital that it defaulted on a US$9.9m loan.
- 8 July 2014: American Apparel is understood to be under pressure to repay a $10m loan from investment firm Lion Capital.
- 8 July 2014: Standard General says it is in talks with American Apparel over its finances, the composition of the board and strategy.
- July 2014: Standard General takes Charney's 43% stake in American Apparel in a change of strategy by the ousted CEO to win back his position.
- 1 July 2014: Charney ups his stake in the US fashion group to 42.98% from 27.2%, while he contests his firing.
- 30 June 2014: American Apparel turns down a request by Charney to hold a meeting of investors.
- 30 June 2014: American Apparel adopts a so-called 'poison pill' stockholder rights plan aimed at warding off unwanted takeover attempts as the battle with Charney intensifies.
- 24 June 2014: Charney pledges to fight attempts to terminate his employment and says some shareholders want him to continue to lead the company.
- 24 June 2014: American Apparel hires advisory firm Peter J Solomon to ensure it has adequate access to capital in the future "at a reasonable cost".
- 23 June 2014: American Apparel dismisses accusations by the lawyer of Charney that he was fired illegally, as the executive gears up for a legal battle.
- 20 June 2014: Analysts say investors will view the news of Charney's departure positively.
- 19 June 2014: Dov Charney is ousted by the company’s board of directors as investigations into misconduct allegations continue.
- December 2012: Former store manager Michael Bumblis is reportedly sues the retailer, accusing Charney of being verbally and physically abusive to the point of rubbing dirt in his face. Bumblis alleges assault, battery, intentional infliction of emotional distress, violation of civil rights, discrimination and harassment based on sexual orientation and religious affiliation and wrongful termination.
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