In yet another lawsuit to affect the beleaguered retailer, American Apparel is suing its founder and former CEO Dov Charney for violating a standstill agreement with the company, which limits how much stock in the company someone can buy during a set 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 Charney violated the agreement, according to Bloomberg Business.
It's the latest in a round of dueling legal actions between Charney and the company he founded. On May 13, Charney filed suit against American Apparel and its chairwoman Coleen Brown for a minimum of $20 million in damages. He accused them of defamation and mental and emotional distress.
The allegations stem from a letter that Brown wrote to American Apparel employees claiming that Charney had agreed not to return to the company. Charney claims he never signed such an agreement.
American Apparel ousted the controversial Charney in June 2014, but Charney has since vowed to regain control of the company he founded. In his attempt to do so, Charney has trespassed on company property, interfered with American Apparel's conference calls, sought to have employees carry out his orders, demanded the retailer's sales reports and threatened employees who refuse to support his return to the company, according to the lawsuit.
In April, former employee David Nisenbaum filed suit against the company. Nisenbaum, who was hired in 2012 to upgrade the accounting and finance departments, claims he was wrongfully terminated when he brought up accusations of mismanagement under CFO John Luttrell. Luttrell served as the interim CEO after founder Dov Charney was ousted.
Under new management, American Apparel has embarked on a turnaround plan that includes growing a digital presence, cutting costs and reducing inventory. It posted a 9 percent decline in sales for the first quarter of 2015 over the same period last year, and a net loss of $26.4 million.
-See this LA Times story
-See this Bloomberg Business article
Former American Apparel employee suing for 'mismanagement'
New American Apparel CEO puts focus on order, discipline
American Apparel delaying supplier payments
American Apparel CEO likely fired over sexual harassment
American Apparel firing CEO over misconduct