American Apparel reportedly seeking bankruptcy counsel

American Apparel Inc. is reportedly seeking advisers to help put together a plan to restructure the company in bankruptcy court, according to two people with knowledge of the matter.

As reported by Bloomberg early morning Wednesday, the troubled apparel retailer would have made calls in recent weeks to advisory firms as it prepares to negotiate a bankruptcy loan with creditors to fund it through the process, said sources close to the matter who preferred to remain anonymous given the private nature of these talks.

Jones Day, which has been helping American Apparel with capital raising, will be expanding its role into a restructuring capacity, said Bloomberg, quoting these sources. Bondholders would also be considering providing more liquidity to the company.

Barely a week ago, American Apparel confirmed its worse fears, advancing that it might not have enough cash as to keep the business afloat for the next twelve months.