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It doesn’t look like Dov Charney will be taking back American Apparel anytime soon.
The U.S. Bankruptcy Court has approved American Apparel’s plans to move forward with its reorganization plan put forth by its executives, the company announced Monday. The decision will help the Los Angeles-based brand exit bankruptcy protection. The Los Angeles Times first reported the news.
“The confirmation of our plan is a great accomplishment for American Apparel. This is a new day for the company, and a positive outcome for our customers, vendors and employees,” CEO Paul Schneider said in a statement.
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In October, American Apparel filed for Chapter 11 that also included a restructuring agreement that would take the company private and give nearly 100 percent control to its largest bondholders. As a result, the decision would force out shareholders, including former CEO Charney.
Earlier this month, American Apparel received a $300 million takeover bid from investors Hagan Capital Group and Silver Creek Capital Partners that would reinstate Charney, who was let go in December 2014 over accusations of misconduct. However, the company’s board rejected the offer.
According to the L.A. Times, the agreement would include the elimination of more than $200 million in bonds in exchange for shares in the reorganized company.
At the time of American Apparel’s filing for bankruptcy, Schneider stated that the financing will help the brand “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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The latest effort in restructuring the company included the closure of its original store location in L.A.’s Echo Park neighborhood, which first opened 12 years ago.
10:50 a.m., Monday, Jan. 25: Updated with a statement from American Apparel.
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