Standard General, American Apparel's hedge fund white knight, is said to be close to a deal to lend the company $25 million.
The loan would help shore up the company's finances, as well as pay the $10 million owed to lender Lion Capital.
On Monday, American Apparel in a regulatory filing with the Securities and Exchange Commission said it received a notice of default from Lion in connection with a credit loan agreement dated May 22, 2013. That agreement allows for the acceleration of the maturity of the loan and other outstanding obligations under the credit agreement. According to American Apparel, Lion Capital said the reason for the default was that Dov Charney has ceased to be chief executive officer of the company.
American Apparel in the filing disputed Lion's claim, and said it would contest the validity of the acceleration.
Any agreement that may be reached between Standard General and American Apparel may also depend on whether consent is required by the other lenders of American Apparel, and where Standard General would stand in the hierarchy of the totem pole in terms of who gets repaid first.
The retailer already is in talks with those lenders of its revolving credit agreement for approval to pay all amounts due to Lion. The terms of the revolving credit agreement does not currently permit the repayment of the loans to Lion.
Standard General last week teamed with ousted founder Charney. Charney was ousted as chairman, and was removed as ceo pending an internal investigation of certain matters. Charney has taken the company to arbitration for what he said is a wrongful dismissal.
The teaming of the New York-based hedge fund and Charney has led to Standard General controlling 44 percent of American Apparel's stock. That in turn has led to a board composition that is expected to contemplate seven members, with co-chairman Allan Mayer and David Danziger staying on. The balance would consist of three members appointed by the hedge fund and the other two to be mutually agreed upon between Standard General and American Apparel.
The Wall Street Journal first reported about the possibility that the hedge fund will loan American Apparel $25 million.
My character, Dinah Madani, is just the coolest, [most] badass woman imaginable," says @amberroserevah. The actress stars in @marvel's newest series on @netflix, @thepunisher. To prepare for her role, Revah sat down with Homeland agents to get a real sense of with Dinah's day-to-day life is really like. Read our full interview on WWD.com. #wwdeye (📷: @jilliansollazzo)
A scene from the 91st annual @macys Thanksgiving Day Parade. The parade, which boasts 50 million TV viewers and 3.5 million on-site spectators, is considered one of the largest and most watched parades in the world. (📷: Jason Szenes/EPA-REX)
The circus came to @bloomingdales 59th Street on Tuesday night and lit up Lexington Avenue with acrobatic dancers, death-defying knife throwing, sword swallowing and aerial acts with no net. The 45 minutes of theatrics built up to unveiling the holiday windows depicting @swarovski crystal-encrusted circus pieces and scenes from “The Greatest Showman” – songs from the soundtrack included. See the rest of the photos on WWD.com #wwdfashion (📷: Joshua Scott)
The psychedelic fashion that pervaded the ’60s is back with an exhibit at the @museumofcityny. “Mode New York: Fashion Takes a Trip” chronicles the changing styles from 1960 through 1973 and features designers such as @ysl, @oscardelarenta and more. The exhibition, which is on display through April 1, is organized into four periods: First Lady Fasion, Youthquake, New Bohemia and New Nonchalance. Pictured here is model Pat Bardonella during the Garvey Day Parade in 1968. (📷: @kwamebphoto) #wwdeye #wwdfashion
“People should be a lot more honest in expressing both the dark and light of themselves. We need to give each other the space to do that because it’s the only way we can grow and evolve,” says @noelwells of her new film “Mr. Roosevelt,” which is largely based on her own struggles. Unexpectedly leaving @nbcsnl in 2014 after just one season, Wells felt set back in her self-esteem and career trajectory. She quickly refocused her energy to more personal projects, which led to the completion of “Mr. Roosevelt.” Read the rest of WWD’s interview with the “Master of None” actress on WWD.com #wwdeye (📷: @jilliansollazzo)
@barbrastreisand is giving fans a chance to see her perform up close in a new concert series, which makes its debut on @Netflix today. From behind-the-scenes takes to her concert performance in Miami last December, the two-hour streaming special captures Streisand in her element. Pictured here is the singer/actress photographed for WWD in 1963. (📷: Palmieri Tony) #wwdeye #wwdarchive
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)