American Apparel Inc (NYSEMKT:APP) Awarded Restraining Order Against Its Former CEO

American Apparel Inc (NYSEMKT:APP) was awarded a restraining order against its former CEO AND co-founder.

The restraining order prevents the former boss from breaching the terms of the cessation contract that the two parties agreed to in 2014. The restraining order includes pushing for his removal from the board of directors. It also bars him from making negative public remarks towards the company or its employees.

American Apparel Inc (NYSEMKT:APP) made the announcement a day after it was awarded the restraining order by the Delaware Court of Chancery earlier this week. The two parties have been going back and forth since Charney was fired.

The firm filed a lawsuit after Charney violated the terms of the agreements. American Apparel dismissed the former CEO from his position late last year after he was accused of sexual harassment and ill-treatment of the company employees.

Prior to his dismissal, Charney had been suspended for six months. He was accused of other offenses such as being involved in a scandal involving nude photos of a female employee being posted online. Additionally he was on a six-month probation for pending investigations based on allegations that he had been misusing corporate funds.

Charney had taken his case to court in an attempt to be reinstated. He claimed that the accusations were not legitimate and that it was a conspiracy by some of the employees. His efforts did not bear fruits, and he later went on to start campaigns that American Apparel complained against.

The firm claimed that his undertakings were creating rifts between the company and some of its high profile contacts. American Apparel Inc (NYSEMKT:APP) went ahead to sue him for his slanderous acts. It is almost as if the former CEO was on a mission for revenge even though he was fired rightfully according to the judicial decision.

If he goes against the court order, the court will have to take more serious actions. American Apparel is trying to recover and move on from the ordeal and the negative image brought on by the whole situation.

 

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Standley Adam

Standley Adam

Adam is a staff reporter for US Markets Daily Publications & Media, covering foreign affairs and domestic policy.