Dov Charney's latest fashion endeavor is still in its infancy, but he's already facing a lawsuit.
The Angeleno who put the American Apparel brand on the world map, only to be booted from the company he created nearly 30 years ago, set off last year to launch a new brand, Los Angeles Apparel. Last week, a company called Pacific Center Place (PCP) filed a civil suit in L.A. Superior Court that alleges Charney, a company he runs called South Central Shoemakers, and two business partners, including his father, cheated the plaintiff in a business deal. The address in the suit is on the same street as Los Angeles Apparel.
We reached out to normally talkative Charney but he did not respond.
The suit says the plaintiff owns the South Los Angeles property where Charney runs South Central Shoemakers. A trio of defendants identified in the suit as Charney, dad Morris and partner George Tashchyan leased the plaintiffs' property in an “oral joint venture/partnership” deal that gave the landlord a 50 percent stake in Charney's endeavor, the filing claims.
On Feb. 15, a fire broke out at the address, the suit says, and the trio, which had formed a limited liability company, made a $3 million claim, the suit alleges. The plaintiff argues that it's owed half that cash. “PCP is entitled to 50 percent of the business, and is therefore entitled to, among other benefits, 50 percent of any insurance proceeds,” the suit claims.
“PCP has been damaged and continues to be damaged in an amount presently unknown but is at least $1,500,000.00,” the suit alleges.
The suit claims breach of a joint venture, breach of an “implied” contract, breach of fiduciary duties, illegal conversion of $3 million in assets, breach of good faith and more. It seeks $1.5 million plus unspecified damages that the claim says will be established at trial. The suit also asks that any assets taken in by the “partnership” be put into a trust fund.
We sought comment from the plaintiff's attorney, Matthew Green, multiple times, but received no response.
At American Apparel, Charney was the subject of sexual misconduct allegations and lawsuits, and in 2014 he was terminated by his board based on allegations he engaged in sexual harassment, violated policy and misused funds and corporate assets. He was subsequently sued by a hedge fund that had invested in American Apparel.
After it was taken over earlier this year by Canadian fashion conglomerate Gildan Activewear Inc., American Apparel's retail stores, which numbered in the hundreds worldwide, were shuttered.