Reports are coming in that American Apparel, Los Angeles, has received a takeover bid of more than $200 million from an investor associated with former American Apparel CEO Dov Charney.
Bloomberg reported that, according to an anonymous source familiar with the situation, if the offer is accepted, Charney would return in some capacity to the company. The company fired Charney more than a year ago after a string of misconduct allegations.
Bloomberg further speculated that Charney's return is somewhat of a long shot, as American Apparel's ongoing bankruptcy case is nearing conclusion, and by seeking protection from creditors in October, the company prearranged that ownership would go to the bondholders, led by Monarch Alternative Capital, in exchange for reduced debt. If this plan is approved, the judge overseeing the case would make a final ruling on Jan. 20.
In order for Charney to find his way back into American Apparel, he would need the company and its creditors to accept his rumored offer. If the company and creditors refuse, he and his investor would need to persuade the judge to reject American Apparel's reorganization plan.
The Los Angeles Times reported that American Apparel evaluates all bids, but is committed to its current plan.
"The company remains focused on the completion of its financial restructuring following its planned bankruptcy court hearing at the end of this month," the company said in a statement to the Los Angeles Times.
We reported in October that current American Apparel CEO Paula Schneider would remain in her position during the restructuring, and that she planned to use the restructuring as a way to strengthen the company.
"This restructuring will enable American Apparel to become a stronger, more vibrant company," Schneider said in a press release in October. “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 new marketing campaigns that will help drive our business forward.”
We'll continue to cover this story as it develops.
For more information on American Apparel, visit www.americanapparel.net.