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Auditors Claim American Apparel Withheld Financial Info

Filed under: Dov CharneyAmerican Apparel

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And the saga continues.

American Apparel's former auditors have fired off a letter to the Securities and Exchange Commission notifying them about the clothing company's filings for the 2009 financial year.

According to Deloitte & Touche, who abruptly resigned as AA's accounting firm in July, their reports can't be trusted because Dov Charney and the other execs withheld financial information.

That can't be good.

American Apparel has already released a statement saying D&T's claims aren't true, but we wouldn't be surprised if the SEC does a little investigation next year.

[Image via Getty Images.]

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More Losses For American Apparel

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Will there ever be good news for American Apparel?

The troubled clothing company submitted their 3rd quarter results to the SEC on Tuesday, and just like the quarter before they posted a loss.

AA reported net sales were down $9.5 million between the months of July and September due to increased production costs.

OK, whatever you say Dov.

[Image via AP Images.]

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American Apparel Finally Hands Over Their 2nd Quarter Results

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Took 'em long enough!

After months of delays, American Apparel handed over their not so shocking second-quarter results to the SEC on Monday.

According to the report, AA had a loss of $14.7 million and "may not have sufficient liquidity necessary to sustain operations for the next 12 months."

Ouch.

The report goes on to say it's "probable that beginning Jan. 31, 2011, the company will not be in compliance with the minimum consolidated EBIT covenant…".

In other words, American Apparel doesn't think they'll earn the $20 million they said they would in their newest agreement with Lion Capital.

Double ouch!

Dov Charney & Co are working to make amendments so they'll remain in compliance, however there's "substantial doubt that the company will be able to continue as a going concern."

Yikes.

Better stock up on your generic clothes now!

[Image via AP Images.]

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Steve Madden Help$ Out Betsey Johnson

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There's good news and bad news for Betsey Johnson.

On Thursday, papers were filed with the Securities and Exchange Commission that Steven Madden Ltd. will take over the $48.8 million loan BJ has defaulted on.

However, if Betsey can't pay back the copycat by August 20, 2012 Madden could end up owning the brand because the company's intellectual property was used as collateral to secure the loan.

Other items used as collateral include "personal property, accounts, deposit accounts and cash, equipment, fixtures, general intangibles, goods [and] inventory."

Wow, that's a lot to lose.

Lets hope she can pay it back!

[Image via Flashpoint/WENN.]

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