American Apparel's suspended CEO seeks arbitration: WSJ

American Apparel Inc founder Dov Charney's lawyer has filed a petition for arbitration to counter plans to strip Charney of his roles as president and chief executive of the company, The Wall Street Journal reported in Tuesday's paper.

The petition, filed on Monday in Los Angeles along with a separate regulatory filing claiming that a support group has rallied around the suspended CEO, may represent an attempt by Charney to regain authority in the company. Charney owns a 27.2 percent stake in American Apparel.

A spokesman for American Apparel declined to comment. Charney's lawyer, Patricia Glaser, was not immediately available for comment.

Company stock plummeted 21 percent Tuesday afternoon to close at about 53 cents, a two-month low. It was not immediately clear what caused the drop.

The board of American Apparel notified Charney of his termination on June 18, saying he misused company funds and helped disseminate nude photos of a former employee on the Internet.