American Apparel Wins Bankuptcy Approval

American Apparel has won approval for a chapter 11 exit.

American ApparelA bankruptcy-court judge approved American Apparel’s chapter 11 plan, which hands over the retailer to bondholders, ending former CEO Dov Charney’s bid to regain control of the company.

Judge Brandon Shannon approved the plan following a two-day hearing last week in U.S. Bankruptcy Court in Wilmington, Del. where the court heard the testimony of current CEO Paula Schneider.

Creditors approved the plan unanimously two weeks ago. American Apparel will trade $230 million in debt for equity with bondholders, eliminating founder Charney’s stake.

The plan will help American Apparel come out of bankruptcy after the plan gets confirmed.

 

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