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American Apparel sues Charney


Photo: Dov Charney

Los Angeles – In the latest set of dueling lawsuits to hit a major retailer, American Apparel is suing its founder and ousted CEO Dov Charney for violating a standstill agreement with the company. Standstill agreements typically limit the amount of stock in a company a party can buy during a certain period of time.

American Apparel filed the suit in Delaware Chancery Court. In a brief statement, American Apparel did not specify the damages it is seeking or exactly how Chaney violated the agreement.

On May 13, Charney filed suit against American Apparel and its chairwoman Coleen Brown for a minimum of $20 million in damages, accusing them of defamation and mental and emotional distress. Many of the allegations revolve around a letter Brown wrote to American Apparel employees in which she claimed that Charney had agreed in writing to never return in any capacity to the company. According to the lawsuit, Charney never signed any agreement. American Apparel said at the time it would “vigorously dispute” Charney’s claims.

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