Hedge Fund, American Apparel Appoint New Board

Jul 24 2014 | 7:39am ET

Struggling retailer American Apparel has named most of its new board of directors under a $25 million rescue agreement with hedge fund Standard General.

Under that agreement, Standard General has the right to pick three of the seven members of the board. It named partner David Glazek and turnaround specialist Thomas Sullivan to the panel, and is expected to name its third director shortly.

Sullivan sits on the board of Media General with Standard General chief investment officer Soo Kim.

The hedge fund and American Apparel agreed on two other board members: RadioShack CEO Joseph Magnacca and former Fisher Communications CEO Colleen Brown. American Apparel’s co-chairmen, David Danziger and Allan Mayer, remain on the board.

“This slate of directors brings significant financial, retail and corporate turnaround expertise to the board,” Glazek said.

Brown’s appointment is something of a milestone for American Apparel as its first female board member in its 25 year history. Her addition comes after company founder Dov Charney was fired for alleged sexual harassment.

Charney’s fate is still up in the air: He is working with Standard General and signed over voting rights to his huge stake in the company to the hedge fund. But Standard General hasn’t promised him a role at the company, pending the results of an internal investigation into his behavior. That probe is expected to be wrapped up next month; he remains a paid consultant until then.

The new board will take their seats on Aug. 2.

In addition to the turmoil surrounding Charney, the new board leads a company that has been losing money for years. American Apparel required Standard General’s bailout after firing its founder, which led private-equity firm Lion Capital—a Charney ally—to call in a $10 million loan, default on which could have jeopardized a larger line of credit from Capital One.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this race. The Citadel...

Guest Contributor

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.