Guy Adams: The 'Jewishest' lawsuit ever – it would have been a treat

it was billed by local tabloids as the "Jewishest" lawsuit New York has ever seen, pitting two of the city's foremost egos in a $10m battle that promised to deliver several weeks of revelations about sleaze, greed and sexual peccadilloes.

Instead, a scandal-hungry crowd gathering at the Federal District Court in lower Manhattan yesterday let out a collective sigh of disappointment, after it emerged that sanity had at last prevailed between the Oscar-winning director and the billionaire bad boy of the US rag trade.

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The public will therefore be denied the prospect of watching the bombastic Dov Charney argue that Woody Allen has no reputation to protect, because of his famously tumultuous love life.

At one point, the fashion impresario had threatened to force Allen's wife, Soon-Yi, to testify about their relationship, and demanded financial records to establish whether his bitter custody battle with ex-girlfriend Mia Farrow had affected his earning potential.

The tactics might seem cheap, but they were true to form for Charney, a swarthy street-hustler of a business magnate who founded American Apparel in the early 1990s, and turned it into one of the nation's most successful high-street brands.

Charney is an unconventional figure, famed for chairing business meetings in his underwear, who admits to having a voracious sexual appetite. In common with Allen, his love life has been bothersome. A string of female employees have sued him for harassment, one declaring that the work environment in his office "makes Animal House look like choir practice".

American Apparel, which makes colourful, basic T-shirts and underwear, has nonetheless carved out a hugely successful niche making, selling and promoting "sweatshop-free" clothing. Because the firm is "vertically integrated" – it does its design, production and advertising "in-house" – it can bring products to market quickly and more cheaply than rivals.

The irony is that this vertical integration spawned the billboard which featured Allen, a man whose personal style revolves around thick spectacles, drab knitwear and tweed jackets.