Former CEO Suing American Apparel For Defamation

(RTTNews) - American Apparel, Inc. (APP) founder and former chief executive officer Dov Charney is suing the fashion apparel retailer and its Chairman Colleen Brown for defamation and false light.

Charney, who filed the lawsuit in the Superior Court of the State of California on Tuesday, is seeking at least $20 million in damages.

"The company believes that such claims are without merit and intends to vigorously dispute the validity of these claims," American Apparel said in a regulatory filing on Wednesday.

Last week, Charney filed a $30 million defamation lawsuit against Standard General, one of American Apparel's largest shareholders.

Charney was fired from American Apparel in December following a six-month suspension for alleged misconduct and violations of company policy. He had been under the scanner over allegations of misusing company funds. An ex-employee sued Charney for posting nude photos of her in a blog, and several female employees have accused him of sexual harassment.

American Apparel shares are currently trading at $0.59, down 3 cents or 4.55%.