UPDATE (October 7, 6:00 p.m.):
Following a court hearing on Tuesday Oct. 6 following its filing for bankruptcy on Monday, American Apparel has been granted access to $90 million in loans while it undergoes refinancing.
US Bankruptcy Judge Brendan Shannon, who made the rushed decision says his declaration "'clears the runway' for the company to start taking care of bills, including payroll," according to Business of Fashion.
See original story from October 5, 2015, below.
American Apparel's ongoing financial struggles have been no secret. Afterattempts to turn the company around over the past year have failed, The New York Times reports that AA will file for bankruptcy.
The Los Angeles-based company, which hasn't made a profit since 2009, lost another $45 million this year. The new financing plan is set to cut its debt from $311 million to $120 million. The deal will also allow it to keep its U.S. stores open and its manufacturing base in L.A.
The restructuring brings the worst news for former CEO Dov Charney who was officially fired last year. Declaring bankruptcy will eliminate his stake as a shareholder, which on Friday was valued at $8.2 million. Luckily for the company, the several lawsuits against it from former employees will be temporarily put on hold while it goes through bankruptcy proceedings. The process is expected to be finished within six months.