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As American Apparel Teeters on Bankruptcy, Charney Supporters Watch For What Emerges From The Ashes

As American Apparel employees stormed the Los Angeles corporate office of the retailer today, yelling chants of “fraud, fraud, fraud,” the company might not have enough money to operate for the next 12 months.

American Apparel shares fall as ousted founder has negative equity in company

American Apparel shares plummeted from trading near $0.21 per share, losing nearly half their value to trade at a low of $0.10 on the day as news negotiations on a credit lifeline were faltering. The Associated Press reported that American Apparel was out of compliance with the terms of its revolving credit facility and talks with Capital One, who provides the credit facility, have not reached a new financing arrangement to date.

The company said it would not be able to file full second-quarter results before the regulatory deadline due to the potential covenant breach, but did report preliminary estimates for the second quarter ended June 30 in its filing. The company said it expects second-quarter sales to slide by 17 percent and losses to grow to $19 million, or about 11 cents per share. Year-over-year the unadjusted EBITDA profit margins are down $29 million,