American Apparel reached a deal with its biggest investor, Standard General. The company will receive up to $25 million from the New York based investor to pay off its debt. In exchange, it will shake up its current Board. Standard General and the current Board will choose two new directors to replace the five out of the seven Board members, including the Founder and former CEO Dov Charney, who will step down. Standard General will have the sole discretion on choosing the remaining three. The current co-chairmen, Allan Mayer and David Danziger, will continue to lead the Board. The financing from Standard General is a lifeline for American Apparel. The retailer has been unprofitable and it missed a repayment deadline on its loan earlier this month. Once the new Board is appointed, it will decide the future role of Dov Charney and determine if he will remain with the company in any capacity. Charney is under investigation for personal and professional misconduct.
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