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American Apparel Rejects Dov Charney-Led Takeover Bid

  • Clothing retailer will push forward with lender-backed plan
  • Chain's founder may need favorable court ruling to win control
Dov Charney.

Dov Charney.

Photographer: Keith Bedford/Bloomberg
Updated on

American Apparel Inc.’s directors rejected the latest takeover offer involving founder and fired Chief Executive Officer Dov Charney, because he and the funds backing him refused to commit about $130 million needed for the deal to win over objections by the company’s senior lenders.

For Charney’s proposal to work, American Apparel would have to abandon its current plan and try to force all of the company’s main creditor groups to accept the new deal. Those groups, including senior lender Monarch Alternative Capital LP, have rejected the Charney offer, American Apparel said in court papers filed Friday.