American Apparel’s bankruptcy proceedings continue to quickly wind through the courts with a judge granting final approval today on the company’s $90.1 million financing deal.
U.S. Bankruptcy Judge Brendan L. Shannon also signed today off on a final order granting the Los Angeles-based firm’s request to begin paying the claims of some of its major vendors in a total amount up to $5 million, according to court documents.
The financing deal was struck with funds associated with Standard General, Goldman Sachs Asset Management and other investors provided the debtor-in-possession financing.
Today’s orders follow last week’s request by the company to begin the store closing process on 13 of its stores. Nine of those operate under the American Apparel brand, while the remainder are under the Oak business. American Apparel acquired Oak in 2013 and is now requesting to completely divest the business in an effort to concentrate on the turnaround of the much larger American Apparel business.
The company also aims to stem the flow of employee departures that have taken place since the bankruptcy filing with a separate motion filed in court last week seeking approval on a $2.3 million employee retention plan reserved for 82 key employees in retail, financing, IT, distribution and other departments.