As CEO of the clothing company, Charney earned an $800,000 annual salary, but on Monday he told Bloomberg that he has only has $100,000 left in the bank.
The clothing company announced last Tuesday that it had fired the former CEO 'for cause' from his role as a consultant, a position he'd held since July.
In June, Charney had been terminated as chairman after the company compiled a long list of his alleged offenses, including sexual harassment, misuse of company funds, and racist comments.
He remains the company's largest shareholder, but doesn't have control of his 43 percent stake because of an agreement with hedge fund Standard General.
Charney told Bloomberg on Monday that he felt betrayed by the hedge fund that had given him a loan in July so he could boost his ownership of the company he had founded.
Charney turned to the firm for help when he was ousted as CEO by the board of directors. I gave them my entire life's work and they agreed to put me back in,' he told Bloomberg. 'But instead they used this investigation to fire me. They betrayed me. I gave them my heart.'
Standard General disagrees with Charney's version of events and released the following statement: 'We supported the independent, third-party and very thorough investigation into the allegations against Mr. Charney, and respect the Board of Directors' decision to terminate him based on the results of that investigation.'
Despite what has happened, Charney has said he plans to keep fighting and is 'suing everyone' with what little funds he has left.
'I gave them my shares so that I could come back and run this company,' he told Bloomberg. 'I bet the farm … They robbed me.'
American Apparel, which Charney founded in 1998, manufactures clothes and sells them in 245 of its own retail stores in 20 countries and has about 10,000 employees. In 2013, it reported more than $630million in revenue.
It is famous for selling American-made goods and for its risque advertising. On Tuesday the firm named longtime fashion executive Paula Schneider to be its next CEO.
The Montreal-born Charney has been the subject of lawsuits that allege he had inappropriate sexual conduct with female employees. He has said he had consensual sexual relationships with workers.
In 2011, a former employee accused Charney of keeping her as a teenage sex slave, fearing she could lose her job otherwise.
She also sued American Apparel and its directors for failing to stop him from acting as a 'sexual predator.'
In 2012, Charney once again came under fire when Michael Bumblis, a former store manager in Malibu, California, accused the CEO of rubbing dirt in his face and choking him.
Charney also allegedly called the man 'a wannabe Jew' and used a derogatory term for homosexuals. Bumblis was later fired from his job.
The company has suffered financially. It has recorded annual losses since 2010 and reported three quarterly losses this year. Its stock has dropped 53 percent in 2014.
Schneider, who officially starts as CEO on January 5, has been a senior executive at retail and clothing companies including Warnaco, Gores Group and BCBG Max Azria.
She said in a statement that she hopes to 'make American Apparel a better company, while staying true to its core values of quality and creativity and preserving its sweatshop-free, Made in USA manufacturing philosophy.'
American Apparel has operated under two interim CEOs since Charney's ouster, most recently Scott Brubaker, who will continue in that role through the end of the year.
