American Apparel Files for Chapter 11 But all its US stores, manufacturing operations will remain By Arden Dier, Newser Staff Posted Oct 5, 2015 7:03 AM CDT 5 comments Comments American Apparel is filing for Chapter 11 bankruptcy protection. The company said that its U.S. retail stores will continue to operate and that its international stores are not affected. (AP Photo/Keith Srakocic, File) (Newser) – American Apparel's legal troubles with its ousted founder, combined with dipping sales and huge debts, have proved too much for the company, which filed for bankruptcy in Delaware on Monday. As part of the Chapter 11 filing, more than $200 million of bonds will be swapped for stock in the company, which had $161 million more liabilities than assets as of June, reports Bloomberg. With bondholders providing $90 million in financing and $70 million in new liquidity, the filing will allow American Apparel to continue its manufacturing operations and keep its 130 US stores open, reports the New York Times. There was no mention of layoffs. The reorganization is expected to last about six months.