Ousted American Apparel CEO Dov Charney accuses lawyers of malpractice
Former American Apparel Chief Executive Dov Charney has sued his former lawyers, accusing them of professional negligence in steering him wrong in dealings with the clothing maker.
In a lawsuit filed in Los Angeles Superior Court, Charney claims that the lawyers at Glaser Weil Fink Howard Avchen & Shapiro committed malpractice and breach of contract in representing him in deals with American Apparel and hedge fund Standard General.
Charney was ousted as chairman and suspended as CEO in June 2014; the board cited evidence of inappropriate behavior with employees and misuse of company funds. He was fired as CEO in December of that year.
After being suspended as CEO, Charney hired Patricia Glaser, a partner at Glaser Weil, to represent him in a wrongful termination complaint.
Charney also teamed up with Standard General, a deal that tied up his own stake in American Apparel in order to buy additional shares as part of a comeback attempt. But that plan failed after Standard General did not back his return to the company.
In the lawsuit, which Charney filed without an attorney, he said his lawyers at Glaser Weil either lacked the experience and knowledge or simply failed to advise him properly when he signed agreements with Standard General and American Apparel shortly after he was fired.
The lawyers “failed to advise me of the legal risks and issues that I was faced with at the time I signed the aforementioned contracts,” Charney wrote in the suit.
If he had been properly represented, Charney said, he would have “sought to negotiate a better deal with my opponents.”
In an interview, Glaser said Charney’s lawsuit was “utterly shameful.”
“Shame on him,” she said. The firm “provided wonderful legal services to him.”
Charney’s shares were rendered worthless after American Apparel emerged from bankruptcy in February. The company, now private, is owned by its former creditors. It exchanged about $230 million in debt into new, private shares under a reorganization plan that was approved by a Delaware bankruptcy court judge.
Follow Shan Li on Twitter @ByShanLi.
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