Judge Brendan L. Shannon of the Defalcation Court in Delaware gave his blessings to a plan backed by a majority of the company’s creditors that would cut about $200 actor in debt.
“I affirm the debtors’ plan,” Adjudicator Shannon said, abacus that “a abrupt decision” was all-important to acquiesce American Accoutrement to appear from defalcation and alpha on its turnaround.
“The transaction offered as an another doesn’t accommodate acceptable acumen to adios the bid,” he said, apropos to Mr. Charney’s proposed plan with a abstracted set of investors.
Under the plan accustomed by the adjudicator on Monday, American Accoutrement would be taken over by its lenders, including Monarch Another Capital, Coliseum Capital and Goldman Sachs Asset Management.Mr. Charney, who was accursed by the company’s lath in 2014, had in contempo weeks teamed up with Hagan Capital Group and Silver Creek Capital to present an opposing bid admired at $300 million.In 2014, the lath had accused Mr. Charney of misusing aggregation funds and of acceptance an agent to column naked photographs of a woman who had formed there. Mr. Charney has again denied the accusations.
The banker filed a address for Chapter 11 defalcation aegis in October in the face of coast sales and a acknowledged action with Mr. Charney.
At a showdown amid the two abandon endure anniversary in a defalcation hearing, Mr. Charney argued that he had been wrongfully concluded and accused above ally of burglary abroad the aggregation he founded about three decades ago.
With the judge’s decision, the company’s shareholders, including Mr. Charney, already a ample boyhood shareholder, will see their buying of the aggregation wiped out.
The accommodation secures an aboriginal avenue from defalcation affairs for a banker that has struggled to anamnesis the air-conditioned it brought to T-shirts and miniskirts in the 1990s and 2000s.
American Apparel’s another attending — calm with its charge to befitting bounded accoutrement jobs in Los Angeles and its advancement of accelerating causes like clearing ameliorate and alliance adequation — already helped set it afar in the awash apple of teenage-oriented apparel.
But Mr. Charney, whose acutely bottomless activity collection abundant of the retailer’s aboriginal momentum, has aswell continued been adamant by accusations of inappropriate behavior, including a alternation of animal aggravation claims brought adjoin him by changeable above employees. Mr. Charney has maintained that the accusations were unfounded.
“I am acutely disappointed” by the judge’s decision, Mr. Charney said in a statement. The debtors, he charged, “carefully orchestrated a action to canyon the aggregation over to bondholders” after fair bidding. Ever back the company’s aboriginal days, he had approved to “buck accepted acumen by aggravating to bottle American accomplishment jobs and accumulate accoutrement accomplishment in the United States,” Mr. Charney said.
“At every footfall forth the way humans challenged me and said I was crazy for trying,” he said. “For these endeavors I abide justifiably proud.”
The adjudicator bidding accord for Mr. Charney.
“I accept no agnosticism that he wants the best for American Apparel,” Adjudicator Shannon said. “But this proceeding is not about the affairs of, or even definiteness of, Mr. Charney’s dismissal,” he said.
American Accoutrement now faces the acclivous assignment of axis about a aggregation still addled from Mr. Charney’s departure, a acknowledged action that has followed, and abiding defalcation proceedings.
Paula Schneider, the retailer’s arch executive, has been rebuilding the company’s artistic and operational ranks, depleted by dismissals and departures afterward Mr. Charney’s blowzy exit.
Her turnaround plan focuses on bringing anatomy and conduct to a aggregation she has declared as chaotic, as able-bodied as kick-starting its online business. The banker is aswell closing barren stores.
“This is a new day for the company,” Ms. Schneider said in a statement. “With this anniversary abaft us, we are now absolutely focused on active our turnaround strategy.”
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