American Apparel Expects to Do Well Post-Bankruptcy

by San Antonio Attorney

American Apparel, a former billion dollar company, is now worth 180-270 million dollars. It is expecting to do well after bankruptcy, as the the fashion chain is set to be a more profitable business in the years to come, according to court documents filed on Thursday.

The fashion line projected that it would resume making profits in 2018.  It would be a remarkable year since its first fruitful profit since 2009, the company stated in a court filing.

The company projected an estimated net profit of $23.7 million by 2020.  This profit is more than its previous peak in 2007.

It addressed certain issues in the court filing that ongoing legal battles with former chairman Dov Charney, continues to be one of the company’s future liability.  Dov Charney, is American Apparel’s founder and was recently removed from his position last year.  Charney is accused of initiating protests at the headquarters and even said that he can undermine his employees.

American Apparel gave reassurance to the suppliers and other creditors that they were important entities to the company’s future.  Though in reality, the chances of them earning a profit is very little, knowing the huge amount of company debt.

At a gathering of creditors, one of American Apparel’s bankruptcy lawyers explained that the company was in Chapter 11 for the purpose of decreasing interest costs.

The creditors who are owed a total of 145 million dollars will receive $1 million to split among themselves, according to the company’s statement in court filings.

The creditors formed an official committee in order to address their interests in the bankruptcy.

The official committees portray an important role through testing a company’s bankruptcy plan. American Apparel, in return, will provide the creditors’ committee with ample budget to recruit legal advisers and financial experts.

The company plans to alleviate its financial troubles through elimination of approximately $200 million dollars in bonds by granting ownership of the company to the bondholders.

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