Report: American Apparel in talks to hire restructuring firm
New York City American Apparel has been pressed by its banking facility to bring in an outside restructuring firm, according to a late Friday report by Reuters.
The report said that lender Bank of America pressured American Apparel to hire a specialist in corporate turnarounds, but that the firm is not being brought in to arrange a bankruptcy, but to help shore up the business.
The firm has not yet been identified, but Reuters said it has been meeting with American Apparel founder and CEO Dov Charney and his executives.
The report also said that American Apparel still has room to fix its fiscal woes, and while the situation was serious, a bankruptcy filing was unlikely for now.
The 279-store apparel retailer in August said it would likely be in default by the end of September on its loan agreement with U.K.-based lender Lion Capital.
The company and its executives were also recently slapped with a lawsuit by shareholders claiming they were misled about American Apparel's true financial condition.
Charney has a controlling stake of 53% of American Apparel. Billionaire investor Ron Burkle purchased a 6% stake earlier in the summer.