An Aéropostale store front.

Time appears to be running out for Aéropostale Inc. The cash-strapped company’s board is set to meet either Monday night or Tuesday and a Chapter 11 filing is said to be imminent.

Employees at the company’s New York headquarters have been called for a town hall meeting Tuesday morning.

Although the nature of the town hall meeting could not be learned, one source noted that chief executive officer Julian Geiger has been spending a lot of time out of the office working on a possible restructuring of the company. “It’s been very quiet over there,” said the source.

Representatives for the company did not return WWD queries Monday afternoon.

Last month, the teen retailer was delisted from the New York Stock Exchange due to its low trading price. The common stock began trading on the OTCQX Best Market.

Aéropostale has been struggling for some time to get the balance right in its business and has gained some traction as of late.

The 810-door chain split itself into two parts, with 60 percent of the doors converted to a factory concept offering a narrow and deep assortment of basics and the remainder of the stores chasing the fashion-forward mall shopper.

Still, it appears to have been too little too late.

On paper at least, the company was in relative decent shape at the end of the last fiscal year. At the end of January, it had $65.1 million in cash and short-term debt payments of just $5 million, with no borrowings under its revolving credit facility.

But Aéropostale became embroiled in a sourcing dispute with Sycamore Partners’ MGF Sourcing division. The retailer said MGF violated their sourcing agreement, while the production company denied the claim.

The company said its first-quarter adjusted operating losses could be negatively impacted by up to $8 million if shipping delays from the dispute continue. Li & Fung was also said to tighten payment terms on the chain, demanding cash up front for shipments.

That essentially starved the retailer of styles to sell, setting up the cash crunch and the expected filing.

In addition to being a key supplier through MGF, Sycamore is also a major lender, having extended the company a $150 million term loan in 2014. That puts the very acquisitive Stefan Kaluzny, managing director of Sycamore, in position to potentially add Aéropostale to his portfolio, which also includes Belk, Hot Topic, Talbots, Nine West Holdings, Coldwater Creek and more.

A filing could also tee up a drawn-out legal battle since Sycamore is seen — at least on some fronts — to be so involved in the company that its debt holdings could be treated as equity in a bankruptcy process, known as equitable subordination.

So as the fight for Aéropostale winds down, the fight for its next incarnation could just be getting started.

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