2 hours ago | By Sandra Halliday
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US fashion chain American Apparel could have its most profitable years to date if the bankruptcy turnaround plan it envisages comes to fruition, according to court documents filed.
The company predicted it would return to profit in 2018 in a filing with the US Bankruptcy Court in Wilmington, Delaware. That would be its first money-making year since 2009.
The retailer also projected a net profit of $23.7m by 2020, which is well above its previous peak in 2007.
However, American Apparel warned in the court filing that its ongoing legal battles with Dov Charney, the founder who was fired as chief executive last year, remain a potential risk to its future. The company accused Charney of arranging protests at the headquarters, and said he could undermine the ability to hire staff and executives.
The company also said that its unsecured creditors, who are collectively owed about $145m, will receive $1m to split among them. The creditors were present in Wilmington, Delaware to form an official committee to represent their interests in the bankruptcy.
The company plans to stabilise its finances by eliminating $200m in bonds by granting the bondholders, a group of hedge funds, ownership of the company.
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