Former American Apparel’s third amended plan of liquidation confirmed

By Caroline Salls

Pittsburgh, Nov. 28 – The third amended plan of liquidation filed by APP Winddown, LLC, formerly American Apparel, LLC, was confirmed Wednesday by the U.S. Bankruptcy Court for the District of Delaware.

The plan calls for the further liquidation of the company’s assets, the dissolution of the APP Winddown debtors, distributions to creditors and the rejection of substantially all remaining executory contracts and unexpired leases.

Under the plan, the debtors’ remaining assets, mostly consisting of causes of action, interests in foreign subsidiaries and recoveries of collateral, will be liquidated for the benefit of the holders of pre-bankruptcy term loan claims.

Other secured claims will be paid in full in cash or satisfied through the return of the collateral securing the claims.

Holders of general unsecured claims will receive a share of distributable creditors’ fund cash.

Intercompany claims will be canceled, reinstated or modified, at the discretion of the reorganized debtors, but no distribution will be made on account of these claims.

Interests will be cancelled if and when the applicable debtor is dissolved. Holders will receive a share of a class 6 distribution.

American Apparel is a Los Angeles-based manufacturer, distributor and retailer of branded fashion basic apparel. The company filed for bankruptcy on Nov. 14, 2016 under Chapter 11 case number 16-12551.

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