American Apparel Faces Fourth Shareholder Lawsuit

A fourth shareholder lawsuit has been filed against Los Angeles, California-based American Apparel.

The filing in the local US District Court seeks class-action status for shareholders that allege they were misled by American Apparel’s leaders regarding how its ability to hire and keep workers would effect its bottom line.

Last year, American Apparel had to let go of up to 1,800 workers who could not prove they were in the country legally after it was revealed that it was being investigated by the US Immigration and Customs Enforcement agency.

The clothing maker, which has about 280 retail stores worldwide, has been challenged recently by $120 million in debt, a possible delisting by the New York Stock Exchange, and slowing sales.