American Apparel considers entering bankruptcy

Clothing manufacturer and retailer American Apparel is considering entering into bankruptcy protection.  The company is based in Los Angeles and would have to raise between $20 and $25 million in order to avoid filing for bankruptcy.

American Apparel is said to have around $5.3 million in cash and reported that it “may not have sufficient liquidity to sustain operations and to continue as a growing concern.”

Last year, the company experienced a 5 percent drop in sales and revenue decreased by around $8.6 million.  American Apparel’s largest creditors would most like be Lion Capital and Bank of America Corp.  Lion Capital is estimated to be owed $81 million and Bank of America Corp. $58 million.