Charney Testifies at American Apparel Case, Ruling Set for Monday
During the company's second day in bankruptcy court in Wilmington, Del., Los Angeles-based American Apparel's founder and former CEO Dov Charney testified for more than two hours, claiming that the company wrongly declined his investor-backed takeover offer.
According to Reuters, Charney testified that American Apparel's board "blackmailed" him in 2014 by offering him a multi-million-dollar severance package if he let go of his large minority stake and left the company. If he didn't, he said he faced "character assassination."
A lawyer for American Apparel told Reuters that the company disagreed with "just about every word" of Charney's testimony.
U.S. Bankruptcy Judge Brendan Shannon said that after two days of testimony, he would make a ruling at 11 a.m on Monday on whether the company's plan was fair and feasible. If approved, the plan would put the company's creditors at the reins, and current CEO Paula Schneider would remain in her position.
"I am fully cognizant that there are two sides to this story," Shannon told Reuters.
We'll report on Shannon's ruling on Monday, so stay tuned to Promo Marketing Headlines.
Related story: American Apparel Reportedly Declines Charney's Bid