• by Thom Forbes  @tforbes, June 23, 2014

American Apparel founder Dov Charney has indicated that he will vigorously fight the allegations of misconduct and sexual harassment that led his company’s board to summarily oust him as chairman and remove him as president and CEO for 30 days, as per his contract, testing the limits of just how much any publicity can be construed as good publicity even by those who have successfully pushed the edge in the past.

“For years, American Apparel has used sex to sell,” NBC News contributor Martha C. White wrote when the story broke last week. “It became a problem when people stopped buying.”

In the past, the company dismissed employees’ lawsuits against founder Charney “as baseless charges brought by disgruntled employees, even as its founder openly admitted to dating his underlings and walking around the company headquarters in his underwear,” White continues. “For a while, this ‘edginess’ was part of American Apparel’s appeal, but the company struggled when the economy went south and never really regained its footing.”

The Wall Street Journal this morning points to a letter sent by his attorney, Patricia Glaser of the self-described “powerhouse” Los Angeles firm of Glaser Weil Fink Jacobs Howard Avchen & Shapiro LLP, to American Apparel board’s attorney, Jones Day, on June 19. It charges that the termination does “tremendous disservice to the Company, as well as causing substantial professional, reputational and financial injuries” to Charney.

According to the letter, Charney was presented with “an absurd and unreasonable demand” to resign within hours and remain as a million-dollar-a-year consultant for four years with millions more in severance or be fired “for cause.” Glaser also characterizes some public statements about the firing as “false and defamatory.” 

“What brought the board to this point was a continuing investigation, opened in March, that found Mr. Charney, 45 years old, allegedly booked airline flights for his parents using company money, stayed in corporate apartments when he wasn't on business, helped arrange the release of naked photographs of a former employee who was suing him and lied on a deposition, among other matters,” sources tell WSJ's Suzanne Kapner, who cites Reuters for breaking news of the charges on Saturday.

Glaser set today as a deadline “for a meeting with the board to discuss fully reinstating Charney as chief executive and chairman,” saying it would otherwise pursue legal action, Shan Li and Andrea Chang report in the Los Angeles Times. The attorney says “the charges mostly ‘involve activities that occurred long ago (if at all) and about which the board and the company have had knowledge for years.’”

USA Today runs down a number of the “multiple lawsuits” against the company and its founder over the years, “some of which may still be pending.” 

Meanwhile, co-chairman Allan Mayer told the Times’ Li and Chang yesterday that American Apparel believes it is on “firm legal ground” on what was a 5-0 vote to dismiss Charney. “It's what we would expect from Dov's attorney in a situation like this, but we continue to believe firmly that we did the right thing, for the right reasons, in the right way.”

The board will not meet with Chaney, Reuters’ Nadia Damouni and Jeffrey Dastin report, “[making] a legal battle with the ex-CEO, who still controls 27% of the company's stock, more likely.”

Mayer is a public relations executive and expert in crisis communications who, points outWomen’s Wear Daily’s Evan Clark, “is going to need all his crisis management skills since the coverage has been a brand’s worst nightmare.” 

In fact, the “departure led to something of a tabloid spectacle over the weekend, complete with nude photos of Charney and a full retelling of the company’s woes,” Clark writes.

“Charney’s story is like a Shakespearean porno — the sex-infused imagery that sold his clothes became the smut that sank his career,” writesTime’s Charlotte Alter in a piece that ties together the “smut shaming” of Charney with that of Terry Richardson, the subject of a New York cover story by Benjamin Wallace last week. 

“It is a sign that times have changed,” Alter continues. “Behavior that used to be tolerated as the price of working with an eccentric genius is now considered unacceptable. No matter how cool you are, you don’t get a ‘free pass’ if the public concludes you’re taking advantage of women.”

Put that way, eccentric geniuses clearly have been overvalued for far too long.