Dov Charney’s ex-lawyer wins victory over Los Angeles mansion

The ex-lawyer of Dov Charney has won a tussle against a hedge fund over the rights to the American Apparel founder’s Los Angeles mansion – and may be set to collect proceeds from a bankruptcy sale, learned The Post.

Charney – who founded the hipster clothing chain in 1989, only to be ousted from the helm in 2014 due to a pile of debt and legal troubles – filed for personal bankruptcy in March. As part of its reorganization plan, Charney has agreed to give up its 20 rooms in the Silver Lake neighborhood of Los Angeles, a source familiar with the matter said.

Zillow lists the hilltop mansion – where Charney still lives as he runs his current Los Angeles Apparel company – as pre-lockdown worth $8.4 million. The residence is listed on the National Register of Historic Places and was built of concrete to withstand earthquakes, according to Wikipedia.

American Apparel founder Charney filed for personal bankruptcy in March.
Los Angeles Times via Getty Images

A Los Angeles bankruptcy court will hear arguments Dec. 1 on whether to approve Charney’s plan, which also calls for him to drop his Costa Mesa, Calif.-based clothing brand Arya’s Vintage Closet, a indicated the source.

In 2015, Charney transferred the deed of trust on the home to his then-attorney, Keith Fink, months after hedge fund Standard General sued him for the bankruptcy of American Apparel. Charney at the time allegedly owed Fink money for unpaid legal services. Standard General, in turn, sued Fink saying it was a fraudulent transfer.

In a little-noticed Nov. 18 decision, California Superior Court Judge Maurice Leiter dismissed Standard General’s case, ruling that the house was so deeply “underwater” with debt at the time of the transfer that ‘it could not be considered a sale to satisfy legal fees.

Charney transferred the deed of trust on the home to his then attorney Keith Fink in 2015.

“As we advised the court at the outset of this litigation in 2018, Standard General’s claims against Keith Fink were dead on arrival,” Fink’s attorney Olaf Muller told The Post. “We intend to seek the full amount of fees, costs and penalties against Standard General and its attorney for knowingly filing and litigating baseless claims against Fink over the past four years.”

Standard General CEO Soo Kim — who, as The Post previously reported, tried to make Charney’s life miserable — will likely appeal the decision, sources said.

Kim’s company is also expected to oppose Charney’s bankruptcy plan, alleging Charney filed it to avoid repaying $20 million the hedge fund lent in 2014 when Charney was under fire for charges. of sexual misconduct. Interestingly, that claim — which was upheld by the courts — has since ballooned to $40 million, sources said.

If the court approves Charney’s bankruptcy plan, the home will be foreclosed and Fink will have a higher claim than Standard General’s position, sources said. Los Angeles Apparel is owned by a trust that is not part of the bankruptcy project.

Kanye West says he hired LA Apparel this year to make his “White Lives Matter” t-shirts, but Charney refused to sell them after West’s anti-Semitic tweets.

Charney’s current attorneys did not return calls.

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