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American Apparel Seeks Bankruptcy Protection Again

Discussion in 'Article Discussion' started by Melody Bot, Nov 21, 2016.

  1. Melody Bot

    Your friendly little forum bot. Staff Member

    This article has been imported from chorus.fm for discussion. All of the forum rules still apply.

    Bloomberg:


    American Apparel Inc. filed for bankruptcy less than a year after ending its first stint under court protection, and agreed to sell the brand to Gildan Activewear Inc., a Canadian maker of T-shirts and underwear, for about $66 million.

    American Apparel filed for protection from creditors Monday, Gildan said in a statement. The Montreal-based company said it’s not buying any stores.

     
  2. RiseAgainst379

    Newbie

    So, I actually work in bankruptcy. A few thoughts: this is chapter 11, which is business reorganization, as opposed to chapter 7 which is liquidation, or chapter 13 where the debtor has a steady income. Chapter 11 debtors are called "debtors in possession," meaning they own substantial assets capable of paying down debt over time. Chapter 11 is by far the most common for corporations. It requires the debtor to propose, then confirm a plan to pay creditors. Courts have very stringent requirements for plan confirmation.

    Also, this was filed in Delaware, which is by far the most pro-business jurisdiction in the Union.

    All in all, I'm sure AA will be fine.
     
  3. KyleK

    Let's get these people moving faster! Supporter

    [Insert Canadian Apparel joke here]

    In all seriousness though, I think it's harder for AA to distinguish themselves as a brand right now with the way that clothing styles have evolved over the past few years.
     
  4. jorbjorb

    Trusted

    I used to get some of their shirts but then I got older and refuse to pay 50 dollars for a shirt.