Dive Brief:

• An unnamed source has told the Los Angeles Times that former American Apparel president and CEO Dov Charney is likely to fight to regain control of the company he founded but that “he won’t succeed.” 
• Other news reports say that it wasn’t just Charney’s brash ways and history of alleged sexual misconduct that led to his dismissal on Thursday, but also concerns with his use of cash and other company resources for personal use.
• American Apparel board member Allan Mayer, who has now been named co-chairman, has said Charney’s ouster came after "certain facts" came to light that had nothing to do with the American Apparel’s performance. According to Mayer, the dismissal was to avoid "material damage to the company" resulting from Charney's "misconduct."

Dive Insight:

Founders of companies are often ousted due to the same passion and brash attitude that garnered their companies’ initial success. Despite Dov Charney’s bold and possibly criminal style, many on the company’s board reportedly like him and see him as passionate about the company. A latecomer investor who helped rescue American Apparel in April — when the company was on the verge of forfeiture — went so far as to call Charney a “visionary” and cited the exec as part of the reason for his confidence in the company. It’s unclear what implications the loss of Charney might have for ongoing investment, but clearly the board has decided that the time has come, after many years of controversy, for him to depart.