LOS ANGELES, United States — American Apparel Inc., the Los Angeles-based seller of t-shirts and underwear, filed for bankruptcy protection as it reorganises its debt.
The company filed to restructure under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for the District of Delaware, the company said in a statement via PR Newswire Monday. American Apparel said it received the support of 95 percent of its secured lenders to implement a pre-packaged reorganisation.
Under the agreement, more than $200 million of bonds will be exchanged for equity interests in the reorganised company and the clothing retailer will have access to financing during and after its restructuring, American Apparel said.
The clothing maker has been in disarray since founder Dov Charney was suspended and then fired as chief executive officer last December for alleged misconduct. The chain posted five consecutive yearly losses dating to 2010, totaling $338 million, before reporting a $92.9 million loss in the first half of 2015.
By: Stephanie Wong; editors: Peter Elstrom, Young-Sam Cho and Stephanie Wong.