American Apparel Imperiled By Lender's Repayment Demand
An American Apparel (NYSE: APP) lender demanded repayment of $10 million, according to published reports.
Lion Capital refused to grant a requested waiver on repayment, according to information first reported by the New York Post.
The company warned in a filing June 19 that with the firing of its Chief Executive Dov Charney, Lion is entitled by terms of its loan to demand immediate payment.
A default on the Lion loan would trigger an event of default under its $30 million loan from Capital One Business Credit, the company noted.
American Apperal had sought waivers from both lenders, but Lion has now reportedly refused.
Last week the company also said it hired Peter J. Solomon Co. as financial advisor to help obtain access to cash.
American Apparel suspended Charney June 18 for alleged misuse of company funds and other minor offenses.
In pre-market trading, American traded recently at $0.75 per share, up 0.8 percent.
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