American Apparel said on Friday that it has emerged from chapter 11 proceedings as a private company after implementing a reorganization plan, the Wall Street Journal reported on Saturday. The emergence ends a painful period for the Los Angeles-based clothing manufacturer and retail chain, which had to grapple with shrinking sales, an outsize store footprint as well as sexual harassment litigation tied to its former CEO and founder Dov Charney. The reorganization plan, which was unanimously approved by creditors, swapped $230 million in debt for equity with bondholders and provided for $40 million of exit capital for the company and a commitment for a $40 million asset-backed loan, American Apparel said. The company noted that among the benefits of the plan, interest expense would decrease by $20 million.
