American Apparel's chief executive told a bankruptcy judge yesterday the retailer could become embroiled in drawn-out litigation if it accepted a takeover bid being championed by its founder and former CEO Dov Charney, Reuters reported yesterday. Los Angeles-based American Apparel Inc., known for its "Made in the U.S.A.” fashion and sexually charged advertising, joined other teen-focused retailers by filing for bankruptcy in October due to changing shopping habits. The company is seeking court approval of a bankruptcy exit plan backed by a group of hedge funds. Charney has objected and is trying to convince the judge to allow a takeover backed by competing investment funds, Hagan Capital Group and Silver Creek Capital Partners, is a better deal. Last week, the company's board rejected the $300 million takeover bid involving Charney. Bankruptcy Judge Brendan Shannon must decide if the hedge fund-backed plan, which has the support of a committee of the company's creditors, is fair and feasible.
