Under the plan, the company’s secured lenders will convert $230 million of secured debt into equity, provide $40 million of exit financing, in the form of debt and equity, and provide a $40 million asset-backed loan. The $80 million of incremental liquidity will support American Apparels turnaround plan, and interest expense will decrease by $20 million. The company will become privately held.
Charney and backers, Hagan Capital Group and Silver Creek Capital, had made a $300 million for the company, which was rejected by American Apparels board. The proposal would have brought back Charney, who was fired as CEO in 2014 after allegations of misconduct.
In his testimony in bankruptcy court last week, Charney accused company executives of pl…
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