Struggling apparel and accessories retailer American Apparel says it reached a deal with hedge fund Standard General and founder Dov Charney to remake its board and bolster finances. Standard General has agreed to provide $25 million to boost American Apparel's finances and to repay a $9.9 million loan from Lion Capital, the company said in a regulatory filing. Standard General, which had acquired a 43 percent stake in American Apparel from ousted CEO Charney in recent weeks, also agreed not to buy additional shares in the company until its 2015 annual general meeting is complete. Five of the current seven board members, including Charney, will voluntarily step down. the company said in the filing. The deal calls for an independent board committee to oversee the continuing investigation into Charney’s alleged misconduct. Charney will serve as strategic consultant until the end of the investigation. Based on the findings, the committee will determine if it is appropriate for Charney to serve as CEO, an officer or an employee of American Apparel.
-Reuters and The Associated Press