American Apparel gets $300 million bid from group supporting Charney

American Apparel on Monday said that it has received unanimous approval of all voting classes for its reorganization plan. But also on Monday, the company received a $300 million buyout offer from an investor group that has the support of American Apparel founder and ousted CEO, the controversial Dov Charney.



The investor group, which is comprised of Hagen Capital Group and Silver Creek Capital Partners, said that its offer is superior to the company's reorganization plan, and has a valuation range of $180 million to $270 million.



The investor group did not specify what, if any, role Charney would play in the company. But in a statement, it noted that his “leadership and vision is central to American Apparel's long-term viability.”



“Removing (Charney) him from the company's board and leadership was a shortsighted mistake and we are seeing the results of this error unfold in the declining performance of the Company today,” stated Chad Hagan, managing partner of Hagan Capital Group.



A hearing is scheduled for Jan. 20 to confirm the bankruptcy plan. The investor group would need to reach a deal with American Apparel before then in order for its plan to take precedence.



American Apparel filed for Chapter 11 in in Oct. 2015. Its reorganization plan includes a $40 million capital commitment from a third-party lender or committee of lead lenders. The company said there will be an amended reorganization plan that will include an increase to the litigation trust to $500,000 and an agreement with the holders of the company's senior secured notes to waive their rights to a cash distribution.



"This is an important step forward in emerging from our restructuring process as a stronger, more vibrant company,” stated Paula Schneider, American Apparel's CEO. “We are gratified to have reached this agreement with our Creditors' Committee and to have achieved this consensus from our unsecured creditors, and we would like to thank them for their support. We remain focused on executing our turnaround plan, and positioning American Apparel for the future by creating new and relevant products, launching new design and merchandising initiatives, growing our e-commerce business, and creating exciting and creative marketing campaigns to share the story of our progress."