As American Apparel executives scrambled to pay vendors this spring, they frequently ran into a frustrating problem: Where were the checks? Many times, the answer was Chief Executive Dov Charney’s Los Angeles mansion. Starting early this year, Mr. Charney began signing all of the company’s checks—hundreds of them every month—one of several bottlenecks that plagued the fashion chain as its finances withered, people familiar with the situation said. Mr. Charney’s sexual antics have commanded the headlines, but beneath the salacious details was a business that had fallen into almost complete disarray, the people said. American Apparel, a major retailer with 10,000 employees and 249 stores, lacked seasoned executives, which often required Mr. Charney to dive in to fix problems. The general counsel was personally managing the company’s fleet of stores. This spring, the legal department was reduced to two people. And Mr. Charney was swimming in checks. They were delivered by assistants to his office or home, where they would pile up for weeks before resurfacing in the accounts-payable department, the people familiar with the matter said. Mr. Charney purposely held the checks while he investigated whether the amounts were correct, said a person familiar with his thinking. [WSJ]
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As you may have heard, last evening Warren Buffett was in New York, to celebrate the re-opening of the 40/40 club with his good friend, Jay-Z. A photo was taken of the brothers from another mother, in which Jay-Z excitedly examines Warren’s tie, as Buffett slips his fingers into Z’s shirt sleeve. While the reason for the latter move is unclear at this time (some have speculated that WB’s hands may have been cold and so what? Is that weird or something?), we now have a bit more clarity re: Jay-Z’s interest in the Oracle’s threads. Read more »
“AIG continues to make good on its commitment to pay the American people back,” the one-time insurance giant and current liquidation special’s CEO said today. Its customers may be a different story.
AIG announced that it has reduced its debt to the federal government by $25 billion–it now owes slightly less than $100 billion–giving the New York Fed big preferred stakes in a pair of subsidiaries it plans to sell off in the not-too-distant future. Another piece of AIG is also set to go, with a bid on its way for the insurer’s aviation-leasing business, International Lease Finance Corp.
Peachy. Too bad things are not going as well as planned at the firm’s flagship insurance business, renamed Chartis to help eliminate that awful Hank Greenberg smell. Seems it may be looking at a $12 billion shortfall, which makes AIG’s proclamations of the soundness of its insurance business sound, to this untrained ear, rather like a lie.