Former CEO Dov Charney is set to offer a takeover bid of more than $200 million for bankrupt American Apparel.
Should the company accept the offer from his investment team, Charney would return to the company he founded in 1998, reported Bloomberg. Charney was fired in June 2014 after accusations of misconduct, but ever since he has vowed to regain control of the company.
American Apparel is currently in its final stages of bankruptcy. The Los Angeles-based company has not made a profit since 2009 due to competition and company controversy. The brand suffered declining sales and eventually sought bankruptcy protection in October 2015. Under the plan, which was supported by 95 percent of the shareholders, ownership of the company would be given to bondholders in exchange for a debt reduction.
But Charney has filed an objection to that plan, offering an alternative restructuring proposal by well-funded investors without financing contingencies, and its diligence is almost complete. The bid would give the apparel company liquidity of $170 million upon exiting bankruptcy, compared with $80 million under the current plan.
American Apparel said it is evaluating all bids and is currently focused on completing its financial restructuring.
-See this Bloomberg article
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