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Deal saves American Apparel; control goes to NY hedge fund

American Apparel has reached a preliminary agreement to transfer control of the board to a hedge fund following the company’s ouster of controversial founder Dov Charney, The Post has learned.

Standard General LP, a New York investment firm that has formed a 43 percent shareholder bloc with the ousted CEO, has agreed to financially guarantee the retailer against the threat of a liquidity crunch under the terms of the Monday deal, insiders said.

The parties are looking to announce a finalized deal as soon as Tuesday, according to a source.

A key concern of the board in negotiations has been the future role of Charney, who was toppled June 18 by a five-member board committee that cited an investigation alleging misconduct.

Despite the Monday agreement, Charney’s future with the company he founded 25 years ago remains very much up in the air — and will remain so at least until the outcome of the board probe, according to a source briefed on the agreement.

Earlier Monday, insiders said lender Lion Capital accelerated a demand for immediate repayment of a $10 million loan that was thrown into default last month by Charney’s ouster.

Under a deal struck Monday afternoon, Standard General has agreed to refinance the loan and could pay it off as soon as this week, if necessary, according to one source.

Either way, the threat of bankruptcy has been averted under the terms of the agreement, sources said.

“The Lion loan is a non-issue,” a source close to the negotiations said Monday.

American Apparel officials couldn’t immediately be reached for comment. Standard General officials declined to comment.

As reported by The Post, American Apparel’s board met late Sunday to discuss the preliminary deal. The board signed off on it Monday afternoon, according to sources close to the situation.

Meanwhile, insiders said Standard General is in talks with turnaround consulting firms Alvarez & Marsal and Alix Partners to support the company’s finance department.

As with Charney, it hasn’t yet been determined what role, if any, will be played at the future company by interim CEO John Luttrell, who until Charney’s ouster was the company’s longtime financial chief.

As reported Sunday by The Post, the preliminary agreement will reshuffle American Apparel’s board, but it will remain a seven-member board, according to a source briefed on the plans.

A slate of new directors is under negotiation, and nominees include at least one woman, according to a source close to the situation.

Co-chairmen Allan Mayer and David Danziger, who led last month’s surprise ouster of Charney, will remain as directors under the deal, according to sources close to the talks.

Meanwhile, Charney, who was stripped of his chairman role on June 18 but who still remains on the board, will be replaced under the agreement, along with American Apparel’s other four directors, the sources said.

Three of the five empty seats will be filled by directors chosen by Standard General, and the remaining two will be mutually agreed upon by Standard General and American Apparel, according to the sources.