American Apparel has acted in “an abundance of caution” as it attempts to steer itself through bankruptcy.
On Monday American Apparel asked in court documents for a 90-day extension to its exclusive period for filing a reorganisation plan following former CEO and founder Dov Charney’s claim that he might make an unwelcome takeover bid.
The fashion retailer filed for bankruptcy in October this year and has since sought a revival. It has gained around $90m in debtor-in-possession financing, closed a number of underperforming stores and has now requested that its exclusivity period for filing a reorganisation plan be extended.
This move also comes as an effort to block alternative plans from influencing the LA-based company’s return. It argued that multiple plans would “quite likely impede – rather than facilitate – meaningful progress” towards its departure from bankruptcy.
Charney, who currently owns 40% of American Apparel’s stock, has made his intents to reclaim the company well known and is in talks with numerous parties about making a bid for the business he founded in 1989.
The former CEO was forced to step down towards the end of 2014 amidst accusations of misusing company funds, as well as misconduct.
American Apparel said that it is expected to have emerged from bankruptcy before the current deadline of 2nd February. However, it wishes to act with “an abundance of caution”. A hearing on its plan will take place on 20th January.
