American Apparel Wriggles Out Of Shareholder Suit

Law360, New York (July 31, 2012, 8:50 PM EDT) -- A California federal judge on Monday dismissed a consolidated shareholder suit accusing American Apparel Inc. CEO Dov Charney and other directors of failing to address immigration law violations, sexual harassment issues and flawed accounting that damaged the company.

U.S. District Judge Margaret M. Morrow found that the shareholders did not sufficiently plead that the board knew about the company's problems and failed to do anything to rectify them.

The shareholders claimed that the board ignored numerous red flags that American Apparel may have had undocumented employees...
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