American Apparel Annual Meeting Not Postponed by Investor Lawsuit

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By Edvard Pettersson

June 9 — Two American Apparel Inc. shareholders have lost their bid to postpone the retailer's annual meeting.

In a June 8 order, U.S. District Judge Michael Fitzgerald confirmed a June 1 decision to tentatively deny a request for a preliminary injunction. Putting off the July 18 annual meeting wouldn't be in the public interest and investors weren't likely to win the case, Fitzgerald ruled.

The two shareholders accused the company of committing proxy fraud when allegedly ousting controversial ex-CEO Dov Charney for refusing to go along with a plan to sell the retailer.

Charney, who the retailed fired in December, was ordered by a Delaware Chancery Court judge earlier this month to muzzle his criticism of the struggling clothing retailer, at least temporarily. American Apparel filed a lawsuit in May accusing the former chief executive officer of launching a “scorched earth campaign” to retake control of the retailer in violation of an agreement covering his departure.

War of Words

Charney has been engaged in a war of words with company officials since June 2014, when the board voted to suspend him. Directors alleged that he violated sexual harassment policies and misused funds.

Charney blames disgruntled Chief Financial Officer John Luttrell for staging a coup after he wouldn't go along with a plan to sell the retailer.

Charney filed a $20 million defamation lawsuit against the company and investor Standard General LP in California state court last month over his ouster. Last week, Charney filed a lawsuit for advancement of his fees and expenses incurred in connection with the lawsuit the company filed.

To contact the reporter on this story: Edvard Pettersson in Los Angeles at

To contact the editor responsible for this story: Michael Hytha at

The June 8 order is available at

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