Dive Brief:
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American Apparel investor Bigger Capital Fund is demanding documentation around the firing of founder and former CEO Dov Charney, according to Bloomberg.
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In a letter to the retailer, Bigger Capital said that the dearth of information may be a breach of fiduciary duties, and says the retailer’s board didn’t appropriately disclose that it was considering Charney’s ouster as CEO in June.
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Under Delaware law, which applies to the retailer because it’s incorporated in that state, shareholders have the right to demand such information. Bigger Capital is the retailer’s sixth largest shareholder, with some 2 million shares.
Dive Insight:
This move by Bigger Capital is a legal step that helps Dov Charney’s fight to stay on at the company he founded, a fight he’s been waging since his June ouster. While the retailer named a new CEO last week and fired Charney from any role in the company — he’d been working as an advisor — he’s not leaving quietly. As revealed last week, American Apparel has also received a takeover bid from Irving Place Capital that is designed in part to bring Charney back. The New York-based private equity firm has offered $1.30 to $1.40 per share.