American Apparel files for Ch. 11 bankruptcy protection

FILE - In this Wednesday, July 9, 2014, file photo, passers-by walk in front of the American Apparel store in the Shadyside neighborhood of Pittsburgh. American Apparel said Monday, Oct. 5, 2015, it is filing for Chapter 11 bankruptcy protection. The company said that its U.S. retail stores will continue to operate and that its international stores are not affected. (AP Photo/Keith Srakocic, File)


NEW YORK (AP) — American Apparel is filing Chapter 11 bankruptcy protection.

The filing comes almost two years after the company ousted founder Dov Charney, who is locked in a legal fight and sued American Apparel for defamation.

The Los Angeles company said Monday that its U.S. retail stores will continue to operate. International stores are not affected.

The plan will wipe out more than $200 million in bonds held by the retailer in exchange for equity interests. Lenders will provide about $90 million in debtor-in-possession financing.

American Apparel’s board has approved the restructuring plan, which is expected to be completed in about six months. It still needs approvals from the bankruptcy court.

Shares of American Apparel Inc. plunged more than 24 percent in Monday premarket trading.

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

WTNH NEWS8 provides commenting to allow for constructive discussion on the stories we cover. In order to comment here, you acknowledge you have read and agreed to our Terms of Service. Commenters who violate these terms, including use of vulgar language or racial slurs, will be banned. Please be respectful of the opinions of others. If you see an inappropriate comment, please flag it for our moderators to review. Also, you can now block any inappropriate user by simple selecting the drop down menu on the right of any comment and selection "Block User" from there.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s