Bankruptcy News

We've summarized the latest docket activity and news for publicly traded companies currently operating under U.S. Bankruptcy Court protection.

Bankruptcy/Chapter 11 / Retailing

American Apparel Chapter 11 Petition, Plan Filed

American Apparel and five affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 15-12055. The Company, which manufactures, distributes and retails branded fashion-basic apparel, is represented by Laura Davis Jones of Pachulski Stang Ziehl & Jones. The Company concurrently filed with the Court a Joint Plan of Reorganization. American Apparel's restructuring support agreement, which has the support of 95% of its secured lenders and has been approved by the Company's board of directors, will substantially reduce the Company's debt and interest payments through the elimination of more than $200 million of its bonds in exchange for equity interests in the reorganized Company and provide the Company with access to financing during and after its restructuring. Under the restructuring support agreement, American Apparel's secured lenders will provide approximately $90 million in debtor-in-possession financing. These supporting creditors have committed$70 million of new capital to support the reorganization and recapitalization of the business. The Company expects to complete the restructuring within approximately six months. Paula Schneider, American Apparel's chief executive officer, comments, "This restructuring will enable American Apparel to become a stronger, more vibrant company. By improving our financial footing, we will be able to refocus our business efforts on the execution of our turnaround strategy as we look to create new and relevant products, launch new design and merchandising initiatives, invest in new stores, grow our e-commerce business, and create captivating new marketing campaigns that will help drive our business forward."

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