American Apparel's board decided Wednesday though a unanimous 5-0 vote to terminate Charney as the company's CEO and president. Charney said he is already in talks with supporters, who approached him after his ouster, to discuss his options, according to a filing made with the Securities and Exchange Commission.
Charney's terms of employment state that a 30-day period is required before he can be terminated. Charney's lawyers also set Monday as the deadline for holding talks with the board to reinstate him.
"Mr. Charney believes that such termination is without merit and intends to contest it vigorously," the regulatory filing said.
American Apparel has said that it terminated Charney after conducting an internal investigation that showed him to have stayed in a corporate apartment while not on official business, using company funds to book airline tickets for his parents and releasing nude photos online of a former employee who was suing him.
Charney and his lawyers have maintained that the allegations are baseless.
The struggling retailer seems to be going ahead with business by appointing Peter J. Solomon Co. to help the company access affordable capital.
"We believe the hiring of a financial and strategic advisor at this important juncture is in the best interest of our stockholders and will help maximize long-term shareholder value," John Luttrell, the interim chief executive, said in a statement.
While many experts say that the company is in a position to be taken over by the right suitor, the American Apparel board has reiterated that the company is not for sale.