Ex-American Apparel CEO Eyes $200 Million Purchase Of Company, OTC Listed Shares Surge

Shares of OTC-listed American Apparel Inc (OTCMKTS: APPCQ) surged higher by more than 17 percent at $0.0265 on Friday after The Wall Street Journal reported that the company's former CEO, Dov Charney, is teaming up with investors to acquire the bankrupt retailer.

According to The Wall Street Journal, Charney's financial backers hasn't been disclosed but the consortium is considering a swap of $200 million worth of American Apparel's debt for equity. However, the publication added that under such a restructure plan, all of the company's shareholders, including Charney, will be wiped out.

Finally, Charney said his offer would result in American Apparel being in better shape compared to 1989, the year when he founded the company.

"American Apparel evaluates all bids consistently, and in the ordinary course," a company spokeswoman told The Wall Street Journal. "The company remains focused on pursuing the completion of its financial restructuring following its planned bankruptcy court hearing at the end of this month,"

Meanwhile, American Apparel is scheduled to present its already existing reorganization strategy for bankruptcy-court approval on January 20. The company hopes to emerge from Chapter 11 shortly after, The Wall Street Journal noted.