Morris Charney, Montreal, QC May 13 2015

A PLEA FOR JUSTICE IN THE CASE OF AMERICAN APPAREL

The truth of what is happening is not all about sexual harassment. That important subject is being used to cover up sins of betrayal and greed as usurpers try to steal a company that Dov labored to build up over a few decades. In response to Dov’s lawsuits Standard General who have taken over at the company claim that it is all frivolous and without merit. Please allow me to reveal from my own experience and observation the extent to which they behave like predators. Even now that the first quarter results have come in a false comparison is made to the accumulated debt of a company that grew to have sales of $600 million; no one currently at American Apparel can hold a candle to Dov’s proven entrepreneurial ability.

A terrible social injustice is being done. I was the oldest [the first] employee of American Apparel. I am Dov’s father and the company started in my basement in Montreal, Canada when Dov was still a young student. It took all my savings and my pension to keep it afloat from the time production/distribution moved to South Carolina and then Los Angeles. I was the architect for many stores and assisted looking after the maintenance of them after the company’s stores expanded to 20 countries. My parents were immigrants to North America. My mother [Dov’s paternal grandmother] worked as a sewer in a knitting factory when she first immigrated. Dov had a good grounding in social issues. Even though I was the sole director of the Canadian company, I was terminated last June [at the same time as Dov] without notice, without severance, no pension, no health insurance.

Provincial tax auditors showed up soon after to do a 3 year tax audit given all the bad publicity being spun by the company directors in order to get Dov fired and to hurt his reputation. One of the many falsehoods being spread by the renegade board was an accusation that Dov had misused funds by benefitting his parents. The tax audit eventually revealed just the opposite. American Apparel employees were using my personal credit cards because of cash flow problems and ran up charges of over $1 million in 3 years. I was doing interim financing at no charge and at great personal risk.

Media spin was getting out of hand. Out of desperation Dov turned to a hedge fund, Standard General, for assistance. They landed up betraying him and aligning themselves with the same renegade board members that were out to get him fired in the first place. Standard General is acting like typical vulture capitalists. They make money stripping down a company and selling off its parts. They start by firing long standing employees and consultants; doesn’t matter if they are managers, designers, sewers or models. They sell off inventory. I saw a 90% sale not long ago at some of the local stores. Leases are terminated. New management and more directors are brought in; all chosen by Standard General all of them are well paid. The stock starts to drop precipitously. Dov’s life long investment and my own lose complete value. New money brought in by Standard General is protected. They are considered secured debtors, shareholders aren’t. Standard General [manager Soohyung Kim] has been involved in a similar manner with Radio Shack. He is supposed to lead them out of bankruptcy. In the process, huge layoffs occurred, stores are being auctioned off, shareholders are getting nothing and all of Standard General’s investment is secured/protected.

Dov never asked Standard General to “save the American Apparel company”. Mr. Kim was supposed to help him get back in control using the shares Dov already owned. It now appears that Mr Kim has stolen the company joining with the renegade board. That injustice will affect all the workers just as I or Dov have been affected. It is unjust to the founder of the company who built it up to what it is, created a brand that is known internationally especially by young people, unjust to all those who participated in its creation, the employees and the shareholders. We have all been duped; it is an outrage.