Former American Apparel CEO Dov Charney is apparently seeking to get back in the saddle again in some capacity as there are reports that he has offered more than $200 million to buy the struggling retail chain. Despite the fact that the former executive was fired over a year ago due to allegations of sexual and financial misconduct, investors lauded the bid today, sending shares of the company higher by as much as 23.45%.

American Apparel Up After Dov Charney Enters Bid

American Apparel heading out of bankruptcy

Don’t get too excited though, as American Apparel became a penny stock last year and its listing was shifted to the OTC Markets the same month the company filed for bankruptcy protection. This month, American Apparel is set to exit bankruptcy with its case entering its last stages. Shares are now hovering around 3 cents per share.

American Apparel filed for bankruptcy protection in October, submitting a plan that would sign over ownership to bondholders. Monarch Alternative Capital led the investing group under the plan. In exchange for handing over ownership, the retailer’s debt would be reduced. The vast majority of secured lenders (95%) supported the deal and will be paid back fully through the proposal. It’s expected that they will approve the plan and that the judge in the case will make the final decision on the plan later this month.

Charney seeks to regain the company he lost

As the retail chain heads toward the end of its bankruptcy case, an investor who is said to be working with Dov Charney has reportedly entered a takeover bid of $200 million, reports Matthew Townsend of Bloomberg. The former executive has repeatedly denied the misconduct allegations, and Bloomberg’s sources said the proposal comes with committed financing.

Charney and the unnamed investor who was said to be working with him face an uphill battle because of the bankruptcy, however. In order for their bid to be accepted, they will have to convince the judge to reject the reorganization plan. The former American Apparel executive formally rejected the plan on Thursday after filing an official objection to it. He also said he has put forth an alternative proposal supported by other investors. His offer doesn’t have any contingencies, and the filing indicates that the due diligence process is mostly complete.

The bid would give American Apparel $170 million in total liquidity after it exits bankruptcy, although the current plan only provides $80 million. Charney’s reported proposal follows commentary last month that he was talking with a number of financial partners and advisers.

Will Charney get back in at American Apparel?

He’s been trying to get back in at the retailer since being suspended in June 2014 after the board of directors said it found evidence that he was misusing company funds and violating the sexual harassment policy. His dismissal became permanent in December 2014.

American Apparel hadn’t been doing well financially under Charney either as it was seeing losses and racking up debt while he was at the helm. The company’s earnings results continued to worsen after he was dismissed until it filed for bankruptcy protection was $397.5 million in debt and $199.3 million in assets.