American Apparel Signs Support Agreement with Standard General
LOS ANGELES--(BUSINESS WIRE)--
American Apparel, Inc. (NYSE MKT: APP) today announced it has reached a
Nomination, Standstill and Support Agreement with Standard General L.P.
and company founder Dov Charney, the beneficial owners of nearly 44% of
the Company's outstanding stock. Under the agreement, Standard General
will provide up to $25 million in immediate financial support to the
Company, the Company's board will be reconstituted, and an independent
board committee will be formed to oversee the continuing investigation
into alleged misconduct by Mr. Charney.
As part of the agreement, Standard General affirmed its support for
American Apparel's sweatshop-free, "Made in USA" manufacturing
philosophy and commitment to maintain the Company's manufacturing
headquarters in Los Angeles. Standard General and Mr. Charney also
agreed to certain standstill and voting limitations through the
Company's 2015 annual meeting.
Other key points of the agreement include:
A reconstitution of the Company's board of directors in which five of
the current seven members, including Mr. Charney, will voluntarily
step down. The departing directors will be replaced by two new
directors, chosen jointly by Standard General and the current board,
and three new directors designated by Standard General. All but one of
the new directors are expected to be independent directors and
unaffiliated with either Standard General or Mr. Charney. The board
will continue to be led by its current co-chairmen, David Danziger and
Allan Mayer. Mr. Charney will not serve as a board member or be
nominated by the Company or Standard General as a board member.
A continuation of the ongoing investigation into Mr. Charney's alleged
misconduct overseen by a newly appointed, independent board committee.
Mr. Charney will serve as strategic consultant until the end of the
investigation. Based on the findings of the investigation, the
committee will determine if it is appropriate for Mr. Charney to serve
as CEO or an officer or employee of American Apparel.
Adoption of a standstill agreement through the Company's 2015 annual
meeting that, among other things, prohibits Standard General and Mr.
Charney from acquiring any additional shares in American Apparel and
limits their vote to no more than one third of the Company's shares on
any issue put to stockholders; their remaining shares would be voted
proportionately to the vote of other stockholders.
"This truly marks the beginning of an important new chapter in the
American Apparel story," said Mr. Mayer. "With the support of Standard
General, we are confident the Company will finally be able to realize
its true potential."
"The last few weeks have been difficult ones for the company, and we are
especially indebted to our special committee members Robert Greene, Marv
Igelman, and William Mauer, who have worked so tirelessly on the
company's behalf," said Mr. Danziger. "Any success the company enjoys in
the future will in large part be the result of their efforts."
The Company is concurrently filing a Current Report on Form 8-K with the
SEC attaching the Nomination, Standstill and Support Agreement in its
THE COMPANY URGES INVESTORS TO READ THE INFORMATION STATEMENT AND ANY
OTHER RELEVANT DOCUMENTS THAT THE COMPANY MAY FILE WITH THE SEC WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Stockholders will be able to obtain, free of charge, copies of the
Information Statement and any other documents filed by the Company with
the SEC at the SEC's website at http://www.sec.gov
and at the Company's website at http://www.Americanapparel.net.
About American Apparel
American Apparel is a vertically integrated manufacturer, distributor,
and retailer of branded fashion basic apparel based in downtown Los
Angeles, California. As of May 31, 2014, American Apparel had
approximately 10,000 employees and operated 249 retail stores in 20
countries, including the United States, Canada, Mexico, Brazil, United
Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, Netherlands,
Spain, Sweden, Switzerland, Australia, Japan, South Korea, and China.
American Apparel also operates a global e-commerce site that serves over
60 countries worldwide at http://www.americanapparel.com.
In addition, American Apparel operates a leading wholesale business that
supplies high quality T-shirts and other casual wear to distributors and
About Standard General L.P.
Standard General L.P. is a New York City-based SEC-registered investment
advisor that manages event-driven opportunity funds. Standard General
was founded in 2007 and primarily manages capital for public and private
pension funds, endowments, foundations and high net worth individuals.
This press release, and other statements that the Company may make, may
contain forward-looking statements. Forward-looking statements are
statements that are not historical facts and are based upon the current
beliefs and expectations and are subject to risks and uncertainties
which could cause actual results and/or the timing of events to differ
materially from those set forth in the forward-looking statements. More
detailed information about these and other factors are detailed in the
Company's filings with the Securities and Exchange Commission, including
the Company's Annual Report on Form 10-K for the year ended December 31,
2013 and Quarterly Report on Form 10-Q for the quarter ended March 31,
2014. The Company's filings with the SEC are available at www.sec.gov.
You are urged to consider these factors carefully in evaluating the
forward-looking statements herein and are cautioned not to place undue
reliance on such forward-looking statements, which are qualified in
their entirety by this cautionary statement. The forward-looking
statements speak only as of the date on which they are made and the
Company undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances.
For American Apparel
Mike Sitrick, 310-788-2850
Source: American Apparel, Inc.
News Provided by Acquire Media
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