American Apparel Files for Bankruptcy

American Apparel (Los Angeles) filed for Chapter 11 bankruptcy Monday, Oct. 5. The filing comes after announcements of the company’s growing debt, declining sales and legal battles over the past year.

The New York Times reports the company's board approved the move after reaching a deal with secured lenders. The deal included a debt-for-equity conversion, which allows bondholders to exchange debt for shares in the company.

The deal also allows extra financing and will keep American Apparel from shuttering its 130 U.S. stores and Los Angeles-based manufacturing operations. No layoffs have been reported.