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American Apparel Says it's Facing Chapter 11- or 7

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Los Angeles-based retailer American Apparel Inc. warned that it could seek Chapter 11 bankruptcy protection, or even be forced to liquidate under Chapter 7, as its financial woes deepen.

The company, known for its risque marketing campaigns and colorful basic clothing, is experiencing “significant liquidity constraints,” according to a Thursday filing with the Securities and Exchange Commission. If its efforts to shore up its balance sheet and turn around its business fail, a bankruptcy filing — possibly prepackaged, with support from some creditors secured in advance — could be on the horizon.

“If we are not able to timely, successfully or efficiently implement the strategies that we are pursuing to improve our operating performance and financial position, obtain alternative sources of capital or otherwise meet our liquidity needs, we may need to voluntarily seek protection under Chapter 11 of the U.S. Bankruptcy Code,” American Apparel said. Read the entire story here [Chicago Breaking Business]