Dive Brief:
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The Bigger Capital Fund, LP, Bachelier, LLC, and the Bigger Family, major investors in American Apparel, have demanded the resignation of David Danzinger and Allan Mayer from the retailer’s board of directors.
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A previous deal earlier this month included a remake of the board, with five members, including ousted CEO and founder Dov Charney, but not Danzinger and Mayer, to be replaced.
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Meanwhile, Standard General LP will likely buy Lion Capital LLP’s $10 million loan to American Apparel, in a move to allow a speedier close of the expensive debt that would also preclude legal tangles.
Dive Insight:
Investment firm Bigger Capital’s letter is a shot across the bow and continues American Apparel’s current drama. Bigger’s letter states in part: “We firmly believe that Messrs. Danzinger and Mayer, who are supposed to remain as directors and Co-Chairmen of the Board, are directly responsible for the value erosion and reputational harm to the Company and as a result have lost the confidence and support of the shareholders and should immediately resign.”