Browning West, a Los Angeles-based investment firm, has sued Montreal-headquartered Top 40 supplier Gildan (asi/56842) and its board of directors – the latest haymaker in a months-long power struggle for control of the publicly traded apparel manufacturer.

The lawsuit from Browning West, which holds about 5% of Gildan’s outstanding shares, asks the Quebec Superior Court to ensure that a planned May 28 annual shareholder meeting proceed on schedule, without interference, and that the rights of shareholders are respected with regard to a proposal from the investment company that calls for replacing eight current board members.

“We want to ensure all shareholders have their votes counted and that the annual meeting be conducted fairly and legally,” said Browning West principals Usman S. Nabi and Peter M. Lee in a joint statement. “As such, we are asking that an independent chair be appointed to oversee the annual meeting.”

The aim of Browning West and other investors that support its plan is to vote in the new board members, who are then expected to return Glenn Chamandy to the CEO position. The investors that have so far publicly pledged to support the overthrow reportedly hold about 35% of Gildan’s outstanding shares.

The board fired Chamandy, Gildan’s co-founder and longtime leader, in December. Directors replaced him with Vince Tyra, an executive with a background that includes private equity and serving as CEO of Broder Bros., which has since evolved into Top 40 supplier alphabroder (asi/34063).

The latest in the corporate war over Gildan: The Top 40 #promoproducts firm's new CEO to start a month early -- on Monday.

As A Shareholder-vs.-Board Battle Rages, Vince Tyra To Take Over As Gildan CEO A Month Early https://t.co/QiQmYUQiLf

— Chris Ruvo (@ChrisR_ASI) January 12, 2024

Chamandy said he was fired without cause, and supporters led by Browning West rallied to him, seeking his immediate reinstatement. The board wouldn’t budge.

A nasty, public battle between the board and Chamandy/Browning West kicked off, with directors saying Chamandy had become a disengaged, ineffective leader and Chamandy/Browning West accusing the board of a smear campaign.

The lawsuit picks up the thread of the Browning West accusations, saying that Gildan and the board disregarded “the rights and interests of shareholders by pursuing a strategy of entrenchment, obfuscation and disparagement of dissenting shareholders, improperly placing their own personal interests ahead of the interests of the company and its shareholders,” a statement reads.

Accusations include that the board leaked corporate documents and confidential information to journalists and shared such information with a third-party “governance expert” hired by the board, while refusing to share those same documents and information with shareholders.

The board also signed what Browning West characterized as an inappropriate support agreement to bulwark its plan to get rid of Chamandy and keep Tyra. The agreement includes board representation rights for a shareholder who has a “conflict of interest due to a significant ownership stake in one of Gildan’s largest customers,” according to Browning West.

Gildan hadn’t responded to a request for comment as of this writing.

Activist investors calling for the return of ousted Gildan CEO Glenn Chamandy met with new CEO Vince Tyra. They were not impressed. That led this:

Activist Investor Goes on Offensive Against New Gildan CEO, Board of Directors https://t.co/dgidyYE9Fb

— Chris Ruvo (@ChrisR_ASI) February 10, 2024

Browning West was initially seeking a special meeting where a vote could occur on its board member-replacement proposal. The board asserted the firm didn’t have legal standing to make such a request and made a court filing to that effect, but still said it would allow a special meeting – at the annual shareholders meeting on May 28.

Browning West then withdrew its request for the special meeting, saying the intended purpose of it was to have the vote as soon as possible. If the meeting wasn’t going to be until May, that negated the desired expediency. A vote became planned for the regular annual shareholder meeting.

Based on estimated 2022 North American promotional products revenue of $762.2 million, Gildan ranked fifth on Counselor’s most recent list of the largest distributors in the industry. In February, the vertically integrated global apparel manufacturer reported that worldwide full-year 2023 sales across all its business divisions – more than just promo – fell 1.4% year over year to about $3.19 billion.