Dov Charney, the notorious founder of American Apparel, has said that he is configuring plans to revive the bankrupt fashion chain in a bid to initiate his return.
Last week, Charney revealed that he had hired Cardinal Advisors LLC to assist him in the process. The preppy retailer’s former boss stated that he is “exploring plans with investors and industry executives in an effort to develop a value-maximising solution”.
Following the company’s filing for Chapter 11 bankruptcy protection in October this year, the board are doubtful of the controversial founder’s actions.
“We can confirm that there is currently no transaction for the board to consider, and that Mr. Charney has submitted nothing more than an indication of interest” said an American Apparel spokesperson.
Those close to the retailer told Reuters that Charney is yet to complete a non-disclosure agreement with the company.
Charney, who owns 40% of the company’s stock, was dismissed from the company following inappropriate behaviour and misuse of American Apparel funds. While Charney has denied the allegations, the business could be completely removed from his control through the company’s next actions.
A possible restructuring agreement could make the company private and would hand over nearly 100% control to its largest shareholders. If this agreement is approved by the Bankruptcy Court, the deal would force out the majority of American Apparel’s shareholders, including its founder.
Bankruptcy experts have said that while Charney may be able to slow down the process in court, he is unlikely to completely prevent the new agreement from taking place.