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More bad news for American Apparel


The hits keep on coming for the embattled American Apparel Inc., which is reportedly on the brink of its second bankruptcy filing in less than two years.

The litigation trustee in American Apparel's bankruptcy has accused the company of disregarding its own reorganization plan by missing a payment to unsecured creditors, according to The trustee is asking a Delaware federal judge to transfer disbursing power before the company possibly files for Chapter 11 again.

The trustee on Monday said that American Apparel had missed the first of two payments to its unsecured creditors required under the reorganized retailer’s Chapter 11 plan, which was confirmed earlier this year, the report said. Court papers indicate the trustee has called for an emergency hearing on Friday at which the trustee will seek to enforce the terms of the plan.

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