Amer Apparel Drops 17% ; Chaney Still Won't Go Away

Troubled American Apparel Inc. APP shares fell as much as 17 percent after its former chairman filed a request for arbitration over his firing. The Wall Street Journal reported former chairman Dov Charney filed the request Tuesday with the American Arbitration Association. American Apparel said Monday it hired Peter J. Solomon Co. as financial advisor to help obtain capital. But the company said it's "not for sale" and had no immediate capital needs. Earlier, in a Securities and Exchange Commission filing, Charney said he will "vigorously contest" his firing. The former chairman and founder holds a 27 percent stake in the apparel maker and said he and other unnamed supporters constitute a "group" that will seek to alter the company's board and management. The company had said it refused a proposed meeting with Charney Monday. Chaney was fired as chairman June 18 for alleged misuse of company funds and other peccadilloes. It's expected he will be removed as chief executive following a 30-day contractual waiting period. American Apparel traded recently at 56 cents a share, down 16.65 percent. Its 52-week high was $2.09.