It’s hard to think of a more uncomfortable situation for a board of directors than having to fire the chief executive officer. Los Angeles-based American Apparel Inc. had this experience on June 18 when the board announced it would give CEO and founder Dov Charney the boot after years of alleged misconduct toward employees, as well as recently sluggish company earnings.
That was just the beginning of the company’s unpleasant summer. Charney, not exactly an executive known for showing restraint, didn’t go quietly. In a highly public manner, he battled with the board for control of the company, until hedge fund Standard General cut a deal with the company, rescuing it from debt and providing for restructuring of the board. The July 9 deal didn’t allow Charney to reclaim his former title though. He was named a “strategic consultant,” though it’s unclear exactly what that position entails.
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