Dive Brief:
-
American Apparel hired David Nisenbaum in 2012 to clean up its accounting and finance, and now Nisenbaum has filed suit against the retailer for wrongful termination.
-
Nisenbaum says that ex-CFO John Luttrell, who also served as interim CEO when Dov Charney was let go last summer, mismanaged bond financing and other financial moves, which cost the company and ran afoul of federal finance law.
-
Nisenbaum also alleges that Luttrell attempted to conspire against Charney, mistreated Nisenbaum on the basis of his religion, and that Nisenbaum was fired after he attempted to bring fraudulent financial dealings to light. He said that some of his attempts to notify the company of fraud and mismanagement were scrubbed from his file.
Dive Insight:
According to David Nisenbaum's lawsuit, things at American Apparel were, unbelievably, possibly more degraded than anyone knew. Try as it might, the retailer is having a tough time putting its past year of infamy behind it, and this lawsuit lets loose some impressively sordid allegations, even for American Apparel. The company will have to answer Nisenbaum’s accusations, and in the case of the financial allegations, his claims could end up catching the attention of regulators.