New York hedge fund Standard General asked a judge this week to prod American Apparel to more quickly move along with its liquidation.
The request, filed in bankruptcy court, came in the form of an objection to American Apparel’s request earlier this month to have the judge overseeing its case extend the period of exclusivity for which the company would have to file its bankruptcy plan to July 12. The company argued it is focused on selling off and is close to deals on some of its stores, nitrogen oxide emission trading credits and some of the Garden Grove plant’s equipment. The company has also been holding store closing sales at the remaining 86 doors still open. The bankruptcy plan was originally due to the court March 14.
Standard General argued the company has had enough time to produce a plan.
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“They have had ample opportunity to develop a plan and should present one or promptly step aside,” attorneys for the firm said in its objection.
Standard General went on to say the company has shown “no evidence of progress toward a plan and no indication that they will need an entire additional four-month period to develop one.”
The hedge fund has skin in the game, being part of the group of lenders that provided post-petition financing in the company’s first bankruptcy and continues to have a stake in the business that is now winding down. Standard General argued in its objection that further delays in filing the plan could impact payout to creditors such as itself the longer the case continues on.
American Apparel in November filed for its second bankruptcy less than a year after emerging from the first. The company’s intellectual property and some of its equipment were sold off to Gildan Activewear Inc. via a bankruptcy auction. The $103 million deal closed in February.
For More on American Apparel in WWD:
American Apparel Sale to Gildan Closes
Standard General Blasts American Apparel Lenders