Zooey Deschanel's breach-of-contract lawsuit against Steve Madden — who agreed, and then reneged, on a deal to produce a line tentatively called "Zooey's Shoes And Accessories" — reveals some details of how the celebrity-clothing-line sausage gets made. And paid for.

• American Apparel's stock is tumbling this morning, following news that the company's dodgy accounting has caught the eye of the U.S. Attorney's office. It's currently trading at 0.83. [AMEX:APP]
• Dov says: "The capital structure issues will work themselves out." [WWD]

• Mickey Rourke, at Max Azria: "I really don't like Max that much. He's a short little guy with a good looking wife. Maybe I'll steal his wife." [WSJ]
• Tom Ford to close-talking columnist: "Are you trying to smell me?" [NationalPost]

• For the September issue of Harper's Bazaar, the magazine interviewed Karl Lagerfeld, speaking as Coco Chanel. In character, the Grand Teuton shared such idiotic reflections as: "I was never a feminist because I was never ugly enough for that." [FWD]