Dov Charney, founder and former CEO of American Apparel, is suing his former business—which fired him in December—for $40 million in damages.
The figure includes $6 million in severance, $1.3 million in vacation time pay, $10 million for emotional distress and 13 million company shares (valued at more than $9 million), according to Bloomberg. He also wants to reclaim art that adorned his office walls.
“I am very concerned about this,” Fink said. “While someone may be able to pencil the value of the art Mr. Charney accumulated over the years in the tens of millions of dollars, the sentimental value is priceless to him.”
Reuters noted that more lawsuits could be on the way, possibly for defamation and breach of privacy in reference to Charney’s personal email. Charney also wants to launch a probe into the $10.4 million the company claims to have spent investigating him. Fink claimed the investigation was not independent, he was denied access to documents and Charney was never questioned.
“These claims are baseless, and we are confident that Dov will lose on each and every one of these,” American Apparel said in an email statement to Bloomberg and Reuters.
Charney launched his company in 1989. It went public in 2007, but has suffered financial troubles in recent years, most notably not making a profit since 2009. In June, the board voted to suspend him with the intent of terminating his employment. The board fired him for cause and hired Paula Schneider to replace him as CEO in December.
Schneider told ABC News’ 20/20 in an interview that aired Monday that Charney “was fired for violating our sexual harassment and our anti-discrimination policy. He was also fired for misuse of corporate assets.”
“You know I have great respect for what he built here, but there were challenges,” she added. “In last five years, the company has lost over $300-plus million, so it wasn’t a financially healthy company, and my goal is to take it [and] turn it around.”
According to The New York Times, the company has begun laying off 180 employees, mostly in manufacturing. Unpaid furloughs that began after Charney was ousted are expected to end after the layoffs are completed.
“It’s very challenging to go down this route,” Schneider told The New York Times. “But we have to conduct business differently in order to survive and to thrive. If we continued down the same path, we’d get the same results.”
The cutbacks are a result of a desire to declutter stores, and therefore produce less clothing and eliminate certain styles. However, it will not lay off retail workers, and actually hopes to expand its retail portion of business.
“We have more than 4,000 styles, many of which weren’t performing,” she said. “So we need style rationalization, and if we carry that forward, it just means less people in the manufacturing side of the business.”
However, Charney denied any wrongdoing to ABC News.
“I’ve been working 365 for 10 years solid, OK? Built a massive brand that captured the imagination of the world and then to treat me like that, to throw me on the street—shame on them,” he said.
While Charney mentioned he is currently planning his return to American Apparel, Schneider said that was not an option.
“He is not allowed to be an employee or an officer or CEO of the company. Period, she told ABC. “There’s no option there.”
