SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549
	SCHEDULE 13D

[Rule 13d-101]

 

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO § 240.13D-1(A) AND AMENDMENTS THERETO FILED PURSUANT TO § 240.13D-2(A)

 

(Amendment No. 13)

 

(Name of Issuer)

 

(Title of Class of Securities)

 

(CUSIP Number)

 

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box o.

 

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.

 

 

 

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This Amendment No. 13 (“Amendment No. 13”) amends and supplements the Schedule 13D, dated December 12, 2007 and filed by Dov Charney (the “reporting person”) with the Securities and Exchange Commission (the “SEC”) on December 26, 2007 (the “Original Schedule 13D”), as amended by Amendment No. 1 thereto, as filed by the reporting person with the SEC on March 23, 2009 (“Amendment No. 1”), Amendment No. 2 thereto, as filed by the reporting person with the SEC on April 16, 2009 (“Amendment No. 2”), Amendment No. 3 thereto, as filed by the reporting person with the SEC on December 7, 2010 (“Amendment No. 3”), Amendment No. 4 thereto, as filed by the reporting person with the SEC on March 1, 2011 (“Amendment No. 4”), Amendment No. 5 thereto, as filed by the reporting person with the SEC on March 28, 2011 (“Amendment No. 5”), Amendment No. 6 thereto, as filed by the reporting person with the SEC on April 29, 2011 (“Amendment No. 6”), Amendment No. 7 thereto, as filed by the reporting person with the SEC on July 11, 2011, Amendment No. 8 thereto, as filed by the reporting person with the SEC on April 1, 2013 (“Amendment No. 8”), Amendment No. 9 thereto, as filed by the reporting person with the SEC on June 27, 2013 (“Amendment No. 9”), Amendment No. 10 thereto, as filed by the reporting person with the SEC on July 5, 2013 (“Amendment No. 10”), Amendment No. 11 thereto, as filed by the reporting person with the SEC on May 29, 2014 (“Amendment No. 12”) and Amendment No. 13 thereto, as filed by the reporting person on June 23, 2014 (“Amendment No. 13”  and the Original Schedule 13D, Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment No. 5, Amendment No. 6, Amendment No. 7, Amendment No. 8, Amendment No. 9, Amendment No. 10, Amendment No. 11, Amendment No. 12 and Amendment No. 13 are collectively referred to herein as the “Schedule 13D”), with respect to the common stock, value $0.0001 per share (the “Common Stock”), of American Apparel, Inc., a Delaware corporation (the “Issuer”).  Capitalized terms used but not defined herein shall have the respective meanings set forth in the Schedule 13D.

 

Item 3.                                 Source and Amount of Funds or other Consideration.

 

Item 3 is hereby amended and supplemented as follows:

 

On June 25, 2014 Dov Charney entered into a letter agreement (the “Letter Agreement”) with Standard General L.P., on behalf of one or more of the funds for which it serves as investment manager (“SG”). The Letter Agreement states that SG intends to purchase Common Stock of the Issuer.  If SG, in its sole discretion, is able to purchase at least 10% of the outstanding shares of Common Stock of the Issuer (the “Condition Precedent”) then SG will loan Mr. Charney an amount equal to the SG Price (as defined below) times the number of shares purchased by SG.  The number of shares and the SG Price shall be determined upon completion of SG’s purchases, and SG shall notify Mr. Charney upon completion of the purchases.  Mr. Charney will use the proceeds of such loan to purchase such Common Stock from SG for the lowest price per share paid by SG for such Common Stock after the first purchase (the “SG Price”).  Mr. Charney will enter into definitive loan documents which will provide for the following:

 

(i)                   The loan will bear interest at 10% per annum, which will be payable in kind.

(ii)                The loan will  mature on July 15, 2019, but may be prepaid without penalty.

(iii)             The proceeds of the loan will be used solely to acquire the shares from SG.

(iv)            The loan will be collateralized by the Common Stock purchased by Mr. Charney from SG and Mr. Charney’s other shares of Common Stock.

(v)               Mr. Charney and SG will enter into warrant agreements granting SG a right to purchase (a) the shares sold to him by SG, and (b) 4,720,941 shares.  The price to be paid for such shares pursuant to such warrant agreements will be the SG Price.

 

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(vi)            Mr. Charney and SG will agree to vote their shares only as agreed between them, provided that notwithstanding such an agreement Mr. Charney may vote his shares (a) in favor of his election to the Board of Directors of the Issuer, and (b) pursuant to the Investment Voting Agreement, dated March 13, 2009 between Mr. Charney and Lion Capital (Guernsey) II Limited.

 

Mr. Charney understands that the Condition Precedent has been satisfied.  As a result of the execution of the Letter Agreement Mr. Charney and SG may be considered to be a “group” under Rule 13D-5(b)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  .

 

Item 4.                                 Purpose of Transaction.

 

Item 4 is hereby amended and supplemented as follows.

 

Mr. Charney continues to intend to engage in discussions with the Issuer and Issuer’s management and the Board, other stockholders of the Issuer and other person that may relate to matters related to governance and board composition, management, operations, business, assets, capitalization, financial condition, strategic plans, the future of the Issuer and other matters concerning the Issuer.

 

Mr. Charney may also consider, formulate, discuss and seek to cause the Issuer to implement various plans or proposals intended to enhance the value of his current or future investment in the Issuer, enhance stockholder value or enhance the value of the Issuer’s assets, including plans or proposals that may involve extraordinary matters relating to the Issuer.  Any such action may be taken or advocated by Mr. Charney alone or in conjunction with other shareholders and/or other third parties, and could include one or more purposes, plans or proposals that relate to or would result in any of the transactions, matters or effects enumerated in Items 4(a) through (j) of Schedule 13D.

 

In addition to possibly acquiring securities as contemplated by the Letter Agreement, Mr. Charney intends to evaluate various alternatives that are or may become available with respect to the Issuer and its securities.  Mr. Charney may from time to time acquire additional equity or debt securities or other instruments of the Issuer or dispose of such equity or debt securities or other instruments in any amount that Mr. Charney may determine in his sole discretion, through open market transactions, privately negotiated transactions or otherwise.

 

The information set forth in this Item 4 is subject to change , and there can be no assurances that the discussions or activities described in this Item 4 will continue or occur or that Mr. Charney will or will not take, or cause to be taken, any of the actions described above or any similar actions.

 

The information in Item 3 above is hereby incorporated herein by reference.

 

Item 5.                                 Interest in Securities of the Issuer.

 

Item 5 is hereby amended and supplemented as follows:

 

The information in Item 3 above is hereby incorporated herein by reference.

 

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Item 6.                                 Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

 

Item 6 is hereby amended and supplemented as follows:

 

The information in Item 4 above is incorporated by reference herein.

 

Item 7.                                 Material to be filed as Exhibits.

 

Exhibit A — Letter Agreement.

 

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SIGNATURE

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Dated: June 27, 2014
	/s/ Dov Charney
	Dov Charney

 

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Exhibit A

 

June 25, 2014

 

Dov Charney

1809 Apex Avenue

Los Angeles, CA 90026

 

Gentlemen:

 

This confirms the agreement and understanding between Dov Charney (“Charney”), on the one hand, and Standard General L.P., on behalf of one or more of its funds (“SG”), on the other, as follows:

 

1.                                      SG presently intends to purchase shares of American Apparel, Inc. (“APP”).  If, in its sole discretion, SG is able to purchase at least 10% of the outstanding shares of APP (the “Condition Precedent”), SG, as lender, and Charney as borrower, hereby agree that SG will lend to Charney and Charney will borrow from SG an amount equal to the SG Price (as defined below) times the number of shares purchased pursuant to the first sentence of this paragraph (the “SG Loan”).  The number of shares and the SG Price shall be determined upon completion of SG’s purchases, and SG shall notify Charney upon completion of the purchases.  In connection with the SG Loan, Charney agrees to enter into loan and security agreements with SG, as lender, to evidence the SG Loan in customary form reasonably satisfactory to SG (such loan and security agreements being hereinafter referred to as the “SG Loan Documents”).  The SG Loan Documents shall provide for (a) a maturity date for the SG Loan of July 15, 2019, pre-payable without penalty, (b) that the SG Loan shall be used solely to purchase the common stock of APP purchased by SG (the “Additional Shares”) at the lowest price paid by SG for such common stock after the first purchase (the “SG Price”), (c) interest on the principal balance  payable at 10% per annum, payable in kind and (d) 47,209,406 shares of common stock of APP owned by Charney (the “Original Shares”) and the Additional Shares shall serve as collateral for the SG Loan.  Until such time as the SG Loan Documents are executed and delivered by Charney and SG and are in full force and effect, this letter agreement shall serve as written evidence of the loan being made hereunder.  In the event Charney fails to enter into to the SG Loan Documents by a date determined by SG in its sole discretion, which shall be the date such shares are transferred to Charney, it shall constitute an immediate default hereunder and all obligations owing from Charney to SG shall, at the option of SG, become immediately become due and payable and SG shall have all of the rights and remedies of a secured creditor. In addition, Charney hereby grants to SG, to secure his obligations for the extension of credit which may be made hereunder, a first priority security interest in the Original Shares and the Additional Shares.  Charney agrees to promptly deliver the Original Shares and the Additional Shares to SG as collateral for the SG Loan, free and clear of all liens, security interests and encumbrances. It will be an event of default under the loan made by SG if any of such shares are not so delivered or if any of such shares are subject to any liens or encumbrances. SG acknowledges that its ability to dispose of the collateral upon a default under the Loan Documents may be limited.

 

 

2.                                      If the Condition Precedent is met, Charney shall enter into the following warrant agreements (the “Warrant Agreements”) in form and substance satisfactory to SG: (a) a warrant (the “Additional Shares Warrant”) giving SG the right to purchase the Additional Shares at an exercise price equal to the SG Price divided by the number of Additional Shares (the “Exercise Price”), and (b) a warrant (the “Original Shares Warrant”, and, together with the Additional Shares Warrant, the “Warrants”) giving SG the right to purchase 10% of the Original Shares at the Exercise Price (the “Original Shares Warrant”), provided that any interest on the SG Loan in excess of $1,000,000 shall be reduced by the in-the-money value of the Original Shares Warrant upon exercise.  The Warrants shall expire July 15, 2017 and may be cash settled.  A failure by Charney to enter into the Warrant Agreements will constitute a default hereunder and under the SG Loan Documents, and all obligations owing from Charney to SG shall, at the option of SG, become due and payable.  The parties acknowledge that shares of APP purchased upon exercise of the Warrants may not be freely transferrable.

 

3.                                      If the Condition Precedent is met, SG and Charney shall enter into a cooperation agreement with respect to the Additional Shares and the Original Shares in form and substance reasonably satisfactory to SG providing that the Additional Shares and the Original Shares shall be voted only as agreed among SG and Charney (the “Cooperation Agreement”).  The Cooperation Agreement shall last for as long as SG holds either the Warrants or any shares of APP acquired from Charney.  A failure by Charney to enter into the Cooperation Agreement will constitute a default hereunder and under the SG Loan Documents, and all obligations owing from Charney to SG shall, at the option of SG, become due and payable.  SG and Charney shall take such action, consistent with their fiduciary duties, applicable law and securities exchange requirements as shall be necessary or appropriate to cause the board to consist of directors nominated by SG and Charney.  The Cooperation Agreement shall provide that, notwithstanding the Cooperation Agreement, Charney shall be entitled to vote the Original Shares (i) in favor of his election as a director and (ii) pursuant to the Investment Voting Agreement, dated March 13, 2009, between Charney and Lion Capital (Guernsey) II Limited (the “Investment Voting Agreement”).

 

4.                                      In order to induce SG to enter into this Agreement and perform its obligations hereunder, Charney represents and warrants to SG as follows:

 

(a)                                 As of the date hereof, Charney owns beneficially and of record 47,209,406 shares of common stock of APP in his own name, free and clear of any lien or encumbrance other than the Investment Voting Agreement.

 

(b)                                 Charney has the capacity to execute this Agreement and to consummate the transactions contemplated hereby.  The execution, delivery and performance by Charney of this Agreement, the SG Loan Document, the Warrant Agreement and the Cooperation Agreement (the “Documents”) are within the power of Charney, and will not violate any applicable law. The execution, delivery and performance by Charney of this Agreement and the Documents do not violate the terms of any agreement or undertaking to which Charney is a party or by which Charney is bound or to which the Original Shares are or the Additional Shares will be subject, and do not contravene the provisions of, or constitute a default under, or result in the creation of any lien (except as expressly contemplated herein) upon the property of Charney under any agreement to which Charney is a party. Charney has duly executed and delivered this Agreement, and this Agreement constitutes a legal, valid and binding obligation of Charney, enforceable against him in accordance with its terms.

 

 

(c)                                  No possible default or event of default exists under this Agreement, nor will any such default begin to exist immediately after the execution and delivery hereof.

 

(d)                                 Charney is not insolvent and is reasonably expected to pay his debts as they become due, both prior to, and immediately after, giving effect to the transactions contemplated hereunder (including funding of the SG Loan) contemplated herein.

 

(d)                                 No notice to or consent of any third party is required under any agreement or instrument in order to permit Charney to perform his obligations hereunder.

 

5.                                      In addition to the foregoing, each party represents and warrants that it has all requisite power and authority to enter into this Agreement and to perform its obligations hereunder. Each party further represents and warrants that this Agreement has been duly and validly authorized by all necessary action on its part and has been duly executed and delivered by each party and constitutes a legal, valid and binding agreement of such party, enforceable in accordance with its terms. This Agreement may be executed in any number of counterparts, each of which will be deemed an original and all of which will constitute one and the same instrument. Such counterparts may be delivered by one party to the other by facsimile or other electronic transmission, and such counterparts shall be valid for all purposes.

 

6.                                      This letter agreement sets forth the entire agreement among the parties with regard to the subject matter hereof and supersedes any prior oral or written agreements or understandings among the parties.

 

ALL DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. EACH PARTY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) RELATED TO OR ARISING OUT OF THIS AGREEMENT.

 

[Signature page to follow]

 

 

Please confirm that the foregoing terms are in accordance with your understanding by signing and returning the enclosed copy of this Agreement.

 

Sincerely,

 

STANDARD GENERAL L.P.

 

 

By:	/s/ David Glazek
	Name:	David Glazek
	Title:	Partner
Accepted and agreed to as of the date
first written above:
/s/ Dov Charney
Dov Charney