American Apparel’s fired chief fights back

New York -- Dov Charney, the ousted chairman and CEO of American Apparel Inc., is fighting back against his dismissal.



In a letter to the law firm of the retailer’s board of directors, Charney's lawyer, Patricia Glaser, accused the directors of illegally firing its chief executive and chairman last week, according to The Los Angeles Times, which obtained the letter. She said Charney planned to pursue legal action against the Los Angeles retailer unless he was reinstated.



American Apparel co-chairman Allan Mayer waived off the warnings and told The Times that the board was confident it was on ‘very firm legal ground.”



"It's what we would expect from Dov's attorney in a situation like this, but we continue to believe firmly that we did the right thing, for the right reasons, in the right way." Mayer continued.



The letter by Charney’s attorney revealed more details of Charney’s dismissal, including that he was given an ultimatum on noon at the Wednesday board meeting: Resign from all his positions at the company or be fired for cause. If Charney resigned, he kept on with the company as a consultant for four years and be given a multimillion dollar severance package. If he did not resign, he would be fired. He was given until 4:40 p.m. that same day to make a decision, with the deadline extended to 9 p.m.



"By presenting Mr. Charney with this absurd and unreasonable demand, the company acted in a manner that was not merely unconscionable but illegal," Glaser wrote in the letter. "For one thing, the company denied Mr. Charney any meaningful opportunity to consider his options."



Charney, who has a 27% stake in American Apparel, declined to resign. The board then handed him a termination notice, according to the letter. Glaser wrote that the document allegedly contained "numerous false and misleading statements" involving the investigation preceding his firing and also his job performance.



Glaser called he accusations against Charney are "completely baseless."



"We question the legitimacy and thoroughness of any investigation that did not involve any discussion whatsoever with Mr. Charney," Glaser wrote. The charges mostly "involve activities that occurred long ago (if at all) and about which the board and the company have had knowledge for years."



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