As previously reported, Dov Charney's too-cool empire was facing financial difficulties and sought assistance. British financial firm Lion Capital stepped in, loaning Charney $80 million in March 2009.
According to the Daily Mail, American Apparel is in even worse shape, with debt rising to $91 million earlier this year.
Last week, Charney released a statement saying the company was still assessing the depth of its financial woes but was not sure it had "sufficient liquidity" to sustain the business for 12 more months.
This comes on top of less financially devastating but equally troubling issues for the company, which has admitted to using models for their ads (despite previously saying they were employees), was accused of hiring employees based on their looks, and made headlines for reports that current staff were forced to sign a $1 million confidentiality agreement.
If Lion Capital (which likely does not hold board meetings in their underwear) chooses to bail American Apparel out once again, Charney will lose his majority stake in the company, and we have to think that the brand will take a different direction to stay in business.
What do you think? Will American Apparel soon be gone or will the provocative label just get a new look?
In related news, read about bankrupt "Real Housewife" Teresa Giudice's $60,000 shopping spree.