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American Apparel 2015

The firm was debtor’s co-counsel to retailer American Apparel and its affiliates in a widely publicized chapter 11 bankruptcy that commenced in October 2015. American Apparel is a nationally known clothing manufacturer and retailer specializing in trendy apparel designed for young consumers. A major institution in the fashion industry, the company filed chapter 11 due to increasing liquidity challenges. The company entered bankruptcy with a negotiated deal with its secured lenders to exchange approximately $200 million in senior notes for equity in reorganized American Apparel. With overwhelming creditor support, the restructuring plan was approved in January 2016. Due to a continued downturn in the retail market, American Apparel and its affiliates filed a second bankruptcy that commenced in November 2016. The company entered bankruptcy with a $66 million dollar stalking horse bid for the sale of certain intellectual property and wholesale assets. At the conclusion of a competitive auction, the purchase price was increased by approximately $20 million to $88 million. The auction also resulted in the sale of certain leases and equipment. The company is currently in the process of liquidating its remaining assets and winding down its businesses.