Seeking to stave off a broad default on American Apparel Inc.’s debt, the company’s biggest shareholder, hedge fund Standard General LP, may pay off a contentious $10 million loan from British private equity firm Lion Capital LLP, reports Bloomberg News, citing an unidentified person familiar with the situation.
Lion Capital LLP had sought repayment on July 4, saying that American Apparel’s ouster of CEO Dov Charney violated terms of the loan agreement. The PE shop has said it would go to court seeking repayment, the New York Times reported.
