American Apparel

It’s a new chapter for American Apparel Inc.

The Los Angeles firm said Friday that it officially exited bankruptcy following the confirmation of its plan for reorganization in late January by a Delaware court judge. American Apparel filed for Chapter 11 protection in October.

“This is the start of a new day at American Apparel,” chief executive officer Paula Schneider said in a statement.

The plan turned roughly $230 million of bonds into equity and provided the company with about $40 million of funding with its exit out of Chapter 11.

“With the enormous debt burden removed, we can now turn our full attention to our strategic turnaround, which will benefit our customers, vendors and employees,” Schneider said.

That turnaround plan includes a focus on new product, advertising and stores.

Last year proved a rough one for the company following the ouster of founder and former ceo Dov Charney. The business continued to be challenged as Charney supporters protested management and called for his reinstatement. Lawsuits were lobbed in multiple directions with many still winding their way through the courts.

There’s also the question of a potential unionization of factory workers, although such efforts have more recently stalled as the National Labor Relations Board awaits an appearance by Charney at a hearing related to the group’s certification.

The NLRB on Thursday asked that a judge in the Central District of California order Charney to comply with a subpoena issued by American Apparel’s attorneys.

At stake is the certification of the General Brotherhood of Workers of American Apparel, which has been picketing the company since March and now has 2,100 participants, according to the group’s petition filed with the board in November.

American Apparel alleges Charney’s involvement with the union creates a conflict of interest that restricts the group from being certified under the National Labor Relations Act. The subpoena instructed Charney to produce any documents showing the purchase of items for use by individuals affiliated with the union and messages between himself and certain members of the group, including president Stephanie Padilha Dos Santos, who could not be reached immediately by phone Friday for comment.

Attorneys for Charney asked that the subpoena be revoked on grounds they were not provided adequate time but that they also do not “relate to any matter under investigation or in question in the proceedings.”

Charney was served on Nov. 18 and the hearing was scheduled for Nov. 23. Charney was also absent at a hearing scheduled for Jan. 12.

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