American Apparel says it has hired advisory firm Peter J. Solomon Company to “ensure that we have adequate access to capital in the future at a reasonable cost,” according to the company’s interim chief executive, John Luttrell.
Owns Nearly a Third of Company
“We believe the hiring of a financial and strategic advisor at this important juncture is in the best interest of our stockholders and will help maximize long-term shareholder value,” he added.
The investment banking advisory firm concentrates on mergers, acquisitions, divestitures, recapitalizations, restructurings and “fairness opinions”.
Meanwhile, American Apparel founder Dov Charney has pledged to fight attempts to terminate his employment and says some shareholders want him to continue to lead the company.
Charney also believes the termination is “without merit and intends to contest it vigorously,” according to a filing with the Securities and Exchange Commission.
It also emerged that Charney intends to hold discussions with American Apparel, its board, and other shareholders on a range of issues including governance and board composition, management, operations, business, assets, capitalization, financial condition and strategic plans.
The filing also disclosed that Charney owns 47.2 million shares in American Apparel, giving him a 27.2% stake in the company.
He was fired by the company’s board of directors last week amid ongoing investigations into allegations of misconduct. Yesterday American Apparel also moved to dismiss accusations by Charney’s lawyer that he was fired illegally.
But the board dismissed him after an investigator they hire allegedly found Charney had learned that a subordinate planned to publish on the Internet nude photos of a woman who had sued Charney for sexual misconduct but did nothing to stop it, the New York Times reported. The board’s decision to oust Charney also was based on his use of company resources for personal purposes, including paying for flights for his parents and using company apartments when he wasn’t doing official company business, according to the report.
“You don’t need the 20/20 vision of hindsight to have known Mr. Charney was a ticking time bomb,” the Times stated. “He was repeatedly sued by employees and former employees, and the board was well aware of the cases. The not-safe-for-work video in which he dances in the buff, and other photos, litter the Internet and can be found with a quick Google search.”