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| | | | 20/10/2015 | Just-Style, Michelle Russell - American Apparel outlines reorganisation plan | | | | | American Apparel outlines plan of reorganisation | | | | | Just-Style reports that American Apparel has outlined a plan of reorganisation that will give it access to $10m in cash as it looks for a way to stay afloat after filing for bankruptcy earlier this month.
In a stock exchange filing this week, American Apparel said it will leave bankruptcy with a $30m loan, a smaller debt loan, and under the ownership of some of its current investors.
The plan, it said, will allow American Apparel to strengthen its balance sheet by converting over $200m of debt into reorganised equity interests, enabling them to exit bankruptcy protection, and with sufficient liquidity to implement their business plan.
The plan will also provide distributions to general unsecured creditors in the form of units in a litigation trust and, to each class of general unsecured creditors that accepts the plan, a portion of a $1m cash payment.
Earlier this month, the Los Angeles based company said it had reached a restructuring deal with 95% of its secured lenders to reduce its debts, enabling the firm to implement a "transformation strategy" to "revitalise" the business and brand, while keeping its production and operations in the US. As part of the deal, American Apparel filed for Chapter 11 bankruptcy. |
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