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Looks like American Apparel might need to sell a lot of $500 goatskin leather moto jackets this fall. The NY Post reports that bankruptcy is looming for American Apparel, in part due to a $15.4 million bond payment due in October. A source tells the Post that the company likely only has $10 million in cash on hand. This spring, American Apparel had to borrow from hedge fund Standard General in order to make the twice-yearly bond payment.
Meanwhile, legal bills for the brand's fight with ousted founder Dov Charney are also piling up. Should American Apparel fall into bankruptcy, the Post claims that Charney is seeking investors to help him buy the company back.
Both American Apparel and Charney didn't respond to a request for comment from the paper. The company will release its quarterly earnings in the next few weeks though, and shareholders don't sound optimistic despite American Apparel's turn-around plan from new CEO Paula Schneider. "My expectation is that the quarter will be horrible," shareholder Michael Bigger told the Post.