Los Angeles - After American Apparel recently entered a with a textile and dyeing house, it seems that the legal issue at hand has been solved for now. The company was previously suing Tri-Star Dyeing and Finishing Co. for withholding fabric, but an agreement has been reached.
Earlier this month, the Los Angeles-based retailer was upset with Tri-Star for not returning 250,000 pounds of raw fabric. American Apparel owed Tri-Star 100,000 dollars in invoices, which is why Tri-Star was refusing to give back the fabric. Recently, as reported by Apparel News, an American Apparel spokesperson has said that “a consensual resolution was reached and the parties continue to work together.” This is good news for the retailer, as the company has upcoming plans with a buyer as it continues towards bankruptcy.
The fabric was important to American Apparel as its withholding could’ve interfered with the retailer’s deal with Gildan Activewear. Gildan is set to purchase American Apparel and its intellectual assets at the bankruptcy auction. Gildan has said it would buy American Apparel for 66 million dollars, however without the company’s raw fabric, the details of the agreement would have been compromised.