(Reuters) - American Apparel Inc APP.A said it was granted a restraining order against ousted Chief Executive and founder Dov Charney who was fired after he allegedly misused company funds and failed to stop defamatory blog posts by an employee.
The order temporarily restrains him from breaching terms of a standstill agreement signed last year, including seeking removal of the company's board members and making negative statements in the press against the company or its employees, American Apparel said in a regulatory filing on Tuesday. (1.usa.gov/1KJK5Pm)
The Delaware Court of Chancery granted the restraining order on Monday.
The company sued Charney in May for violating the standstill agreement.
In a statement, Charney’s lawyer Stephen Brauerman said, ”The Court’s order is preliminary and based on pleadings, we have not had an opportunity... fully to challenge at this stage.
“Mr. Charney intends fully to comply with the Court’s order,” he added.
Brauerman said he does not believe the decision impacts lawsuits outstanding that Charney has filed against the company, such as a claim for $40 million in damages for breaches of his employment contract.
Charney was fired in December, six months after he was suspended for allegedly misusing company funds and for failing to stop a subordinate from creating defamatory and impersonating blog posts about former employees, according to Charney’s suspension letter.
Reporting by Sruthi Ramakrishnan in Bengaluru; editing by Andrew Hay