American Apparel said to pay debt worth 13 million this week

American Apparel is reportedly set to make debt payments worth 13 million dollars on Friday,

according to sources close to the matter. These could be the first signs of stability for the polemical retailer in months.

American Apparel Inc. (NYSEMKT:APP) will be making interest payments worth 13 million dollars today, advanced sources familiar with the matter in an interview with Bloomberg, hence throwing some light at the end of a rocky tunnel.

The company's board unanimously voted for the removal of Dov Charney as the company’s CEO over misconduct and abuse of corporate funds. His suspension activated a clause whereby the Los Angeles-based apparel retailer was put in default, as a result of which Lion Capital LLP, a creditor, demanded immediate repayment of its 10 million dollars loan in July.

But disposed CEO did not take the news well and hired an army of lawyers to fight what he called "wrongful and baseless allegations".

To exert extra pressure on American Apparel’s board, Dov Charney boosted his stake in the company to 40 percent by buying up common stock worth 20 million dollars, financed by key shareholders and a New York hedge fund Standard General LP. In return Mr. Charney agreed to share voting rights with the hedge fund.

The hedge fund agreed to purchase American Apparel’s mature debt - worth 10 million dollars - and in return proposed major board changes that would help the company’s revival and make Mr. Charney’s re-instatement as the company’s spearhead easier.