American Apparel’s latest financial savior isn’t worried about recent allegations that CEO Dov Charney sexually assaulted a group of his female employees. Michael Serruya, who last week managed to save American Apparel from defaulting on its debt covenants, said he thinks the sexual assault case against Charney is an attempt to take advantage of his bad image.
Serruya talked with WWD about the nature of his deal with American Apparel, which stripped Charney of his majority stake in the company and which should free up around $45 million over the next six months for the company to “open new stores … and to pay off debt.” But he dashed any suggestion that Charney should be ousted from the top of the corporate heap — for mismanagement or for any other reason.
“The big reason for our investment was Dov. He really embodies the soul of American Apparel,” he noted. Of Charney’s legal battles related to multiple alleged instances of sexual harassment Serruya added: “I think a lot of what he is going through is a shakedown. We’ve done due diligence. Obviously it’s in front of the courts but I think time will tell.”
Right, because time heals all wounds. Serruya might not be able to see Charney for who and what he is, but he is a rather talented financier when it comes to failing businesses. Two years ago he oversaw a similar financing deal for Jamba Juice, which has since rallied. If the same thing happens for American Apparel, Charney could regain his majority stake one day — and might be shielded by enough money to make any little legal blemish disappear with the blink of an eye.