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Thursday, July 17, 2014

Hedge fund plans American Apparel future without ex-CEO Charney, (AMEX: APP)

Standard General, a little-known hedge fund that has taken the reins of American Apparel, has mapped out a recovery plan for the retailer with or without its ousted Chief Executive Officer Dov Charney. The fund invests in companies that have potential even though they may be bogged down by debt and are undergoing an event such as bankruptcy.Standard General has not always succeeded - consider its passive investment in RadioShack's stock, which has fallen about 69 percent this year. But it has a track record of turning positions in distressed companies into board seats and eventual profitability.The 14-employee firm manages about $1.1 billion. In 2013, it posted returns of 32.5 percent net of all fees on its offshore fund, according to a document obtained by Reuters. That fund was up 8.6 percent in 2012 but down 6.2 percent in 2011, according to a separate report.Standard General first focused on American Apparel six months ago, because it "has a strong underlying brand but was in turmoil," the fund's partner David Glazek told Reuters. "It has a balance sheet problem that we can help fix," he said.

American Apparel, Inc. is a vertically integrated manufacturer, distributor, and retailer of branded fashions basic apparel and accessories for women, men, children and babies. Shares of APP remained unchanged at $1.15. In the past year, the shares have traded as low as $0.46 and as high as $2.09. On average, 6035780 shares of APP exchange hands on a given day and today's volume is recorded at 3062021.