It’s over: Charney loses bid to return to American Apparel

It looks like the proverbial fat lady has sung for Dov Charney, the founder and ousted CEO of the troubled American Apparel.



On Monday, Judge Brendan L. Shannon of the Bankruptcy Court in Delaware approved a plan backed by a majority of the company’s bondholders. The plan would take American Apparel private and hand nearly full control to its largest lenders.



Charney had tied his comeback hopes on investors Hagan Capital Group and Silver Creek Capital who submitted two takeover offers in recent months, including, most recently, a $300 million bid that was rejected by American Apparel’s board. The investors supported Charney’s return to the chain.



“I confirm the debtors’ plan,” Judge Shannon said. “The transaction offered as an alternative doesn’t provide sufficient reason to reject the bid."



In regards to Charney, who gave an emotional plea to the court last week, Judge Shannon said he had no doubt that Charney “wants the best for American Apparel and especially for its thousands of employees.” But he noted that the bankruptcy court hearing was not about founder’s dismissal.



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