American Apparel has filed for Chapter 11 bankruptcy protection almost a year after ousting founder Dov Charney, a Montreal-born Jewish man, who is now locked in a contentious a legal fight with the retailer.
American Apparel cautioned in August that it didn’t have enough financing to keep operating for the next year and that investors could suffer big losses on their investments.
American Apparel has lost money every year since 2010, with revenue wilting as competition from fast-fashion retailers has increased.
The company is being sued by ex-CEO Charney, who was fired in December following allegations that he had violated its sexual harassment policy. Charney denies those charges.
Charney has also filed a $30 million lawsuit against Standard General, one of the company’s biggest shareholders, for defamation.
Source: The Times of Israel