The saga of American Apparel and its founder Dov Charney continues with Charney in a Delaware bankruptcy court pleading a case for his return.
American Apparel is in the final stages of bankruptcy and should its restructuring plan be approved, ownership of the company would be given to bondholders in exchange for a debt reduction.
Earlier this month, Charney offered $200 million to takeover the company he founded in 1998. His plan offered alternative restructuring provided by investors.
But current management argues it was Charney's mismanagement that got American Apparel into its current predicament. CEO Paula Schneider told the court that the company reporting structure was controlled by Charney, creating operational disarray, reported Bloomberg Business.
"More than 70 people told me they reported to Dov," Schneider told U.S. Bankruptcy Judge Brendan Shannon. To fix that, Schneider had to reorder the company and "get people to get into their own lanes."
There was also the need to "tone down" American Apparel's famous racy advertising and allegations of Charney's own misconduct.
The Los Angeles–based company has not made a profit since 2009.
-See this Bloomberg Business article
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