Stockholder Demands Resignation of Two American Apparel Board Members
A Canadian shareholder who owns a minority stake in American Apparel stock is calling for the last two senior members on the clothing company’s board to resign.
Michael Bigger issued a statement saying he would like to see the resignation of David Danzinger and Allan Mayer, the co-chairmen of the board, who called for the ouster of American Apparel founder and chief executive Dov Charney in June. This year, five new members have been named to the board, with Danzinger and Mayer the only two who pre-date Charney’s ouster.
Bigger, whose Bigger Capital Fund LP, Bachelier LLC and Bigger Family fund own more than 2 million shares, previously asked in a letter dated July 17 for the two board members’ resignations. Bigger would like the two to be replaced with board members who represent American Apparel’s minority shareholders.
“Danzinger and Mayer, with their fellow directors at the time, directly caused enormous economic and reputational harm to the company and must take responsibility,” Bigger wrote to the board.
American Apparel declined to comment about the issue.
The Canadian shareholder said he was concerned that the company spent $5.4 million in the third quarter to investigate whether Charney should be permanently ousted as CEO. Charney currently is acting as a paid consultant while the investigation continues.
“It is of great concern that the board and its sustainability committee have failed to complete the Charney investigation to date,” Bigger wrote. He went on to say the committee had been scheduled to wrap up its investigation no later than 30 days from July 9, subject to extensions the suitability committee determined in good faith to be reasonable.
“Four months later, no conclusion has been communicated and shareholders remain entirely in the dark regarding the status of the investigation,” Bigger said.
Charney, who with hedge fund Standard General owns around 44 percent of the Los Angeles–based company’s stock, was suspended as chairman and chief executive pending an ongoing investigation into alleged misconduct that included alleged inappropriate behavior with women.
On Nov. 7, Bigger tweeted he dined with Charney and reiterated that the two co-chairmen of the board needed to resign.
