The company’s statement, provided to ABC News, continues, “based on the findings of the investigation, the committee will determine if it is appropriate for Mr. Charney to serve as CEO or an officer or employee of American Apparel.” Charney initially owned 27.2% of the company’s shares and borrowed $20 million from New York hedge fund Standard General to bump his stake to nearly 44%, a move that more or less forced the board’s hand. As part of the newly reached agreement, the two parties cannot buy “any additional shares in American Apparel, and [it] limits their vote to no more than one third of the company’s shares on any issue put to stockholders.” Also, five of the seven board members, including Charney, will resign.
Bloomberg Businessweek’s latest issue stars the “Sleaze King” and elaborates on the investigation, conducted by advisory firm FTI Consulting. Once completed — it could be as soon as early August — Standard General hopes to install a fresh board comprised of “experienced retailers and turnaround and corporate-governance experts” to define Charney’s role, or lack thereof. “They control the shares. I’m a bystander,” Charney explained. “My first issue is to save people’s jobs, put the company into a stable financial situation. And then we’ll evaluate whether or not I’ll be the janitor or the CEO or the consultant.” As a testament to his work ethic, Bloomberg Businessweek shares, “One time, Charney took a deep interest in the lighting in the stores and studied bulb temperature and the Kelvin light scale.” So our pick, since he suggested it, would be janitor.