American Apparel’s ousted chairman and CEO, Dov Charney, has turned over voting power of his shares in the company to Standard General and will give up his seat on the board as part of the deal. Charney has retained his right to vote his shares in favor of his re-election to the board, but he has agreed that he will not seek a board seat. Standard General now controls 43% of the American Apparel’s stock and voting power.
As part of the agreement, Standard General has agreed to refinance a $10 million loan from Lion Capital that the lender said became due when Charney’s removal activated a change-of-control clause in the loan’s covenants. The New York Post reported late Monday afternoon that Standard General could pay off the loan from Lion Capital “as soon as this week if necessary.” Lion Capital called the loan on Monday, but it is now a “non-issue” a source told the Post.
Two of American Apparel’s current board members, co-chairmen Allan Mayer and David Danziger, will remain and the other five members will be replaced, three by Standard General and two by mutual agreement between the hedge fund and the company.
Charney has no guarantee from Standard General that he will have any role in the future of a company that may not have a future at all. Shares closed at $0.885 Monday but rose more than 5% in after-hours trading to $0.93, in a 52-week range of $0.46 to $2.09. Trading volume was heavy, with 8.75 million shares changing hands Monday, compared with a daily average of 5.3 million.
ALSO READ: American Apparel Needs a Merger
100 Million Americans Are Missing This Crucial Retirement Tool
The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.
Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.
A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.
Click here to learn how to get a quote in just a few minutes.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.