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American Apparel Puts Protective Stockholder Rights Plan in Place

TheStreet

American Apparel adopted a one-year stockholders rights plan over the weekend, aimed at preventing ousted chief executive Dov Charney from seizing control of the company. On Friday, Charney submitted a regulatory filing with the SEC that reveals he entered into a five-year loan agreement with investment firm Standard General to increase his stake in the company. Standard General will lend Charney money to buy at least 10% of American Apparel's outstanding shares. Now, American Apparel has introduced a poison-pill defense that it says protects its stockholders against any person or group seizing control of the company without appropriately compensating them. TheStreet's Brittany Umar reports from New York.