The American court has approved American Apparel‘s restructuring plan, but founder Dov Charney will not be coming back to his brainchild. He has also revealed he will not appeal the decision.
Despite 300 million dollar offer
Troubled fashion chain American Apparel can work towards its relaunch, led by a new owner. The commercial court at Wilmington (Delaware) has just approved its restructuring plan, which will give its current debtors shares in return for 230 million dollars in bonds. Its Chapter 11 is now over and a number of hedge funds, including Monarch Alternative Capital, will take over the chain.
The court’s decision immediately ends Dov Charney’s acquisition attempt. The contested American Apparel founder bid 300 million dollars, backed by two investment firms (Hagan Capital Partners and Silver Creek Capital Partners), to re-acquire the chain he founded in 1989. In 2014, he was fired after sexual intimidation complaints.
Charney already said he would throw in the towel, even though he did lash out at the current board one last time. “The sad reality is that American Apparel, the largest garment manufacturer in the United States, will not survive at this pace, and I don’t believe the current management has the talent to bring it back to health.” CEO Paula Schneider obviously disagrees. “The goal here is we have some liquidity, we have some really great strategies in place, a really great management team and an incredible brand. I want to take all of that and move it forward.” 8,700 people work for the clothing group.
