Wednesday, 27 July 2016
Last updated 7 hours ago
Aug 28 2014 | 4:27am ET
Lion Capital Management may not be an investor in American Apparel anymore, but it still wants a seat on its board.
The hedge fund, which pushed the struggling retailer into a cash crunch last month when it called in a $10 million loan, still owns warrants to take a 12% stake in the company—and the right to appoint two board members. And it told the firm that it plans to appoint former Rupari Food Services CEO Robert Mintz to join the seven other directors of the newly-reconstituted board.
Mintz will join American Apparel’s two co-chairmen, three directors appointed by hedge fund Standard General and two others jointly agreed by Standard General and American Apparel. Standard General took control of American Apparel in concert with former CEO Dov Charney, who was fired in June over allegations of sexual harassment.
Lion was a major supporter of Charney and exercised its right to call in the loan after his ouster. American Apparel is currently conducting an investigation into Charney’s conduct before making a final decision on his fate.
Mintz is actually a childhood friend of Charney’s, having gone to school with him in Montréal. His appointment comes after he reached out to Lion’s Lyndon Lea to ask how he could help American Apparel.
Lion acquired its warrants and board rights at the end of 2013. The hedge fund has been without representation on the American Apparel board since 2011.