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June 29, 2014
12:20 EDTAPPAmerican Apparel adopts stockholder rights plan after Dov Charney filing
American Apparel announced that a special committee of its Board of Directors has adopted a one-year stockholder rights plan that is designed to strengthen the ability of the Board of Directors to protect the company's stockholders. The company's stockholder rights plan was adopted in response to reports of rapid accumulations of the company's outstanding common stock. The special committee believes this plan is an important tool to ensure that all American Apparel stockholders are treated fairly. This decision was made in the context of today's SEC filing by Dov Charney in which he expressed an intent to acquire control or influence over the company. The Board of Directors previously suspended Mr. Charney as CEO and declared its intent to terminate him for cause based on an ongoing investigation of misconduct. The rights plan is designed to limit the ability of any person or group, including Dov Charney, to seize control of the company without appropriately compensating all American Apparel stockholders. It is intended to provide the Board of Directors and stockholders with time to make informed judgments. It does not affect trading by passive investors, as it allows such investors to accumulate as much as 15% of the company's common stock and has no impact on a takeover proposal for the entire company acceptable to the holders of a majority of the company's shares. Under the terms of the rights plan, Dov Charney will not be deemed to “beneficially own” any of the securities beneficially owned by Standard General, SG, as referenced in Amendment No. 13 to the Schedule 13D dated December 12, 2007, filed by Mr. Charney on June 27, solely by reason of the letter agreement dated June 25, between Dov Charney and SG . However, Charney will be deemed to “beneficially own” all such securities beneficially owned by SG upon either entry into the definitive loan documents contemplated by the Letter Agreement, entry into the cooperation agreement contemplated by the Letter Agreement, any purchase of securities by Charney from SG following execution of the Letter Agreement or entry into any other agreement, arrangement or understanding with SG which would otherwise give Mr. Charney beneficial ownership of the securities beneficially owned by SG.
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October 6, 2015
19:35 EDTAPPAmerican Apparel pushes for restructuring under Standard General, Reuters says
Bankruptcy attorneys for American Apparel stated that the company is "in the early stages of an operating turnaround" under the control of hedge fund Standard General, reports Reuters, citing court proceedings. Reference Link
06:36 EDTAPPAmerican Apparel trading suspended by NYSE, delisting procedures commenced
American Apparel announced that on October 5, the company received a notification letter that the staff of NYSE Regulation, Inc. has determined to suspend trading immediately and commence proceedings to delist the company's common stock from NYSE MKT. The Notice states that the Exchange determined that the company is no longer suitable for listing and will commence delisting proceedings pursuant to Section 1003(c)(iii) of the NYSE MKT Company Guide. As disclosed in the company's press release date October 5, the company and certain of its domestic subsidiaries have voluntarily filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. The Notice states that in reaching the delisting determination, NYSE Regulation noted the uncertainty as to the timing and outcome of the bankruptcy process, as well as the ultimate effect of this process on the value of the company's common stock. The company does not intend to appeal the delisting determination. Therefore, it is expected that the company's common stock will be delisted from NYSE MKT.
06:27 EDTAPPAmerican Apparel eyed by Authentic Brands, NY Post reports
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October 5, 2015
05:23 EDTAPPAmerican Apparel files for Chapter 11 reorganization
American Apparel announced that it has reached a restructuring support agreement with 95% of its secured lenders to implement a pre-arranged financial restructuring. This reorganization will enable the company to implement a comprehensive transformation strategy to revitalize the business and brand, while keeping its production and operations in the U.S. Throughout the implementation of this process, American Apparel will continue to operate its business without interruption to customers, employees and vendors. The restructuring support agreement, which has been approved by the company's board, will substantially reduce the company's debt and interest payments through the elimination of over $200M of its bonds in exchange for equity interests in the reorganized company, and provide the company with access to financing during and after its restructuring. As part of this agreement, American Apparel, and certain of its domestic subsidiaries have voluntarily filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. The company expects to complete the restructuring within approximately six months. Under the restructuring support agreement, American Apparel's secured lenders will provide approximately $90M in debtor-in-possession, or DIP, financing. These supporting creditors have committed $70M of new capital to support the reorganization and recapitalization of the business. The company anticipates that such financing will be more than sufficient to fund its ongoing operations and pave the way for a successful reorganization. As a result of the reorganization, American Apparel's debt will be reduced from $300M to no more than $135M, and annual interest expense will decrease by $20M. American Apparel has filed with the Bankruptcy Court and expects to obtain approval for various customary motions for immediate relief to allow the company to make certain necessary payments to employees and suppliers that will permit it to continue operating without interruption during the initial phase of the restructuring. The company will pay all of its suppliers in full under normal terms for goods and services provided on or after the filing date of October 5. American Apparel's international operations are not affected by the reorganization in the U.S. The restructuring plan is subject to satisfaction of certain customary conditions, including approvals by the Bankruptcy Court. If the restructuring transactions contemplated by the restructuring support agreement are consummated, the company's existing common stock will be extinguished and the holders of the common stock will not receive any consideration, consistent with legal priorities.
05:19 EDTAPPAmerican Apparel files for Chapter 11 reorganization
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