- Kristopher Fraser |
New York - As the vote by creditors to approve their plan for bankruptcy comes up, American Apparel is attempting to gain as much hold on their bankruptcy case as possible.
In October, the company filed for Chapter 11 bankruptcy, and now they are asking a judge for a 90-day extension to file a reorganization plan as reported by Reuters last week on December 31. This move also blocks any other potential reorganization plans from being filed.
In their efforts to reorganize, the company has shuttered under performing stores, and also struck and agreement to sell Oak NYC back to its original owners.
In court documents, American Apparel said their reasoning for not wanting other reorganization plans filed is that it would increase costs and "quite likely impede — rather than facilitate — meaningful progress.”
American Apparel seeks bankruptcy extension
The company has an exclusivity plan that lasts until February 2, but they expect to be out of bankruptcy before then. The extension is requested for "an abundance of caution", while the hearing is scheduled for January 20.
In the never ending saga that is the company's ongoing trouble with founder Dov Charney, his latest stint is trying to find more ways to get back into power at the company. He has currently been in talks with four parties in hopes of making a bid for the manufacturer and retailer.
Currently, American Apparel is working on closing more stores due to sluggish sales in November and December. Last week, they asked a judge for permission to close eight additional stores, including their stores in Echo Park on Sunset Boulevard; their 3rd Street Promenade store in Santa Monica; the Fashion Valley Mall store in San Diego, and one store in Santa Clara. The remaining stores to be closed are are in Norwalk, Conn.; Jersey City at the Newport Mall; Bridgeport Village in Tigard, Ore.; and Madison, Wis.photo:store.americanapparel.com