American Apparel's $300-Million Lifeline
The troubled retailer has not been out of the headlines since 2014
AMERICAN APPAREL could come back from the brink if a takeover that plans to reinstate its founder is approved. Hagan Capital Group and Silver Creek Capital Partners, the investors behind the offer, announced a $300 million takeover bid yesterday - with the caveat that sacked founderDov Charney would be reinstated.
Dov Charney
"Dov's creativity, entrepreneurialism and dedication are the cornerstone of American Apparel," Chad Hagan, managing partner of Hagan Capital, toldBloomberg. "Removing him from the company's board and leadership was a shortsighted mistake, and we are seeing the results of this error unfold in the declining performance of the company today."
Charney was dismissed by the American Apparel board in 2014 for misconduct - including alleged misappropriation of company funds, andfor violating the chain's sexual-harassment policy.
The alternative for the brand would be to accept a bankruptcy plan that would hand ownership to bondholders. The new plan - which asserts that major creditors will be repaid in full, unlike the bankruptcy plan in which only a portion of their outlay will be repaid - is likely to be more attractive to the company's many lenders, but their acceptance of it is not yet assured.
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