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Dov Charney Hit with Yet Another Lawsuit; This One Concerns an Alleged Swindle and Book Cooking

Whether American Apparel CEO Dov Charney actually conducts company meetings in the nude is something the courts will have to settle. But the oft-sued Charney has just been hit with more litigation. This from a company employee who claims Dov has swindled her.

Los Angeles- American Apparel has been slapped with yet another lawsuit – this time from an ex-employee alleging that CEO Dov Charney swindled her out of her share in the fast-growing retail chain as it went public.

In a suit filed yesterday in California Superior Court, former employee Nikky Yang repeated charges brought in earlier lawsuits that Charney routinely sexually harassed female employees – conducting business meetings in the nude, for example.

The suit also echoes charges in another suit last month that Charney allegedly cooked the books in 2006 before American Apparel went public.

Yesterday’s suit also alleges that Charney forced Yang to move inventory between stores, resulting in “inflated sales and false net profits.”

American Apparel responded yesterday with a lawsuit of its own, accusing attorney Keith A. Fink – who brought Yang’s complaint along with several others against American Apparel – of “an extortion attempt against American Apparel,” and said one of Fink’s clients got a court fine for submitting false documents.

Yang said she helped American Apparel through various financial scrapes since its infancy in 1996, working long hours for little pay and even loading up her personal credit card with company expenses.

In return, Yang alleges that Charney nickel-and-dimed her while promising her a stake in the company, telling her “you are like family to me and we are going to be rich.”

Yang charges that, after she refused to testify on Charney’s behalf in a sex-harassment suit, the company retaliated by firing her and denying her the long-promised ownership stake.


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