CEO Paula Scheider Resigns from American Apparel

by San Antonio Attorney

American Apparel is undergoing another change as the company’s CEO Paula Scheider is reportedly leaving the company effective on Oct. 3.  Scheider, who became part of the clothing manufacturer in January 15, had been ejected from her position after an internal investigation about her misconduct.  Chelsea Grayson, chief administrative officer of the company, will assume Schneider’s role.

According to reports, she stated in her resignation letter that the sale process now ongoing for the entire or some parts of the American Apparel will probably be insufficient to allow the company to proceed along the strategy needed for the plan to thrive or keep up with the brand’s ideals.

Schneider’s job was to save the troubled company, which has suffered repeated losses within the past 5 years before it filed for Chapter 11 bankruptcy in October 2015.

The change in leadership happened just after the recent departure of Paul Charron, Liz Claiborne Inc.  CEO and chairman, who accepted the chairman of the board position in March.  When he left, Brad Scher assumed his role.  In a memo distributed to American Apparel’s employees, Scher stated that the company is looking at opportunities to get more investors to stimulate the growth of the brand.  The operation continues, according to the memo.

Companies file for Chapter 11 bankruptcy when sales are down and they are having trouble paying the bills.  Some of the large businesses that filed for Chapter 11 bankruptcy are Macy’s, Chrysler, General Motors, and American Airlines.  They used the bankruptcy process to reorganize their debts and keep their business going.

Chapter 11 is very complex, requiring the expertise of a bankruptcy attorney.

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