Hipster clothing maker American Apparel this week announced that it has been warned by the New York Stock Exchange that it could have its stock delisted because it has yet to file a quarterly financial report that was due in June. What this means, according to some observers, is that the downtown Los Angeles-based clothier is one step closer to bankruptcy.
The clothing maker stated the following:
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... [American Apparel] received a letter from the NYSE Amex LLC (the "Exchange") stating that the company's timely filing of its Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 (the "Form 10-Q") is a condition for the company's continued listing on the Exchange, as required by Sections 134 and 1101 of the Exchange's Company Guide, and that the company's failure to timely file the Form 10-Q is a material violation of the company's listing agreement with the Exchange.
The 280-store fashion brand has had troubles since last year when it was forced to lay off 1,800 workers who couldn't prove their legal status. Subsequently its auditing firm quit, some shareholders have sued, and others vowed to investigate the company's financial management.
The U.S. Attorney's Office subpoenaed the company regarding its auditor troubles.
American Apparel has stated it might be able to file the requisite financial data by mid-November. That might not satisfy the gods of NYSE, however.