Legal battle likely between American Apparel board, founder
The board of American Apparel rejected a demand to meet with and reinstate ousted founder and CEO Dov Charney on Monday. Because Charney owns 27% of the company’s stock, it makes a legal battle between the two sides more likely, according to Reuters.
The primary reason for Charney’s firing last week wasn’t that his alleged sexual improprieties irked employees and executives, but that they had become very expensive. The company’s employment practices liability insurance retention had grown to $1 million, and it had trouble attracting outside investment while Charney was in charge. BuzzFeed published his termination letter on Sunday.
The Wall Street Journal reported over the weekend that Charney was essentially given the choice of quitting or being fired after the board began an investigation in March into his behavior and use of company funds.
Politico profiles Google lobbying operation
Google’s sizable lobbying apparatus was the subject of a piece in Politico last night, detailing not only the company’s significant K Street operation but also its presence in many state capitols.
US brands still on World Cup bandwagon
Top US brands from McDonald’s to Pizza Hut rallied behind the US national soccer team last week after it beat Ghana 2-1. They took a slightly more subdued approach after Sunday evening’s 2-2 tie with Portugal.
Meanwhile, CNBC explored whether the US squad can lift the stock market.
Three other things to know Monday morning:
- General Motors dealers are struggling with the automaker’s spate of recalls, the latest of which cited issues with 3 million cars. The company is also nearly finished determining payout amounts for victims of crashes that involved malfunctioning Chevrolet Cobalt ignition switches.
- An Egyptian court sentenced three journalists to seven years apiece in prison for supposedly spreading falsehoods and supporting terrorism. The trial was widely decried by critics as a sham. The sentence prompted the #FreeAJStaff trend on Twitter on Monday morning.
- Lance Armstrong is facing a $120 million lawsuit alleging he defrauded the government by using performance-enhancing drugs during his Tour de France winning streak. He was sponsored by the US Postal Service for much of that time.