Bloomberg cites people familiar with the situation, who say that if American Apparel accepts the offer and deal goes through, Charney would be back in the saddle again in some capacity. He was ousted more than a year ago amid allegations of misconduct.
It might not be so easy for Charney, however, as American Apparel’s bankruptcy case is wrapping up. The retailer filed for bankruptcy protection in October of this year, after earlier admitting it’d run out of financing to keep things going. The proposed bankruptcy plan would give ownership of the company to bondholders in exchange for a reduction in debt, and was supported by 95% of secured lenders. They’ll get all their money back under the proposal.
If the plan goes through as expected, a judge would make a final decision on Jan. 20. That means Charney doesn’t have much time to get the company and its creditors to accept his offer. If he fails to woo them, he and his financial ally would have to convince a judge to put the kibosh on American Apparel’s reorganization plan. He’s moving in that direction already, filing an objection on Thursday to the current reorganization plan and saying he has advanced an alternative restructuring proposal by well-funded investors, Bloomberg says.
American Apparel declined to answer Bloomberg’s specific questions about the offer, instead saying that it “evaluates all bids consistently, and in the ordinary course. The company remains focused on pursuing the completion of its financial restructuring following its planned bankruptcy court hearing at the end of this month.”