Earlier today, American Apparel filed for Chapter 11 bankruptcy. The LAist published a post with further details about the filing available here. The article cites to the company’s debt issues and the legal bills related to the sexual harassment lawsuits, defamation, corporate shareholder disputes, and an unlawful termination lawsuit involving their former CEO, Dov Charney, as the root of the need for a bankruptcy filing. With a lack of liquid assets and huge amounts of debt resulting in significant interest payments, the corporation created a financial restructuring model which they hope to have accepted by the Delaware bankruptcy court and trustee. Read more about the bankruptcy details in this recently published LA Times article.
American Apparel Files for Chapter 11 Bankruptcy