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The Board Of American Apparel Inc (NYSEMKT:APP) Adopted Stockholder Rights Plan

Boston, MA 06/30/2014 (wallstreetpr) – American Apparel Inc (NYSEMKT:APP) on June 28, 2014 announced that the Special Committee of Board of Directors of the company adopted one-year stockholder rights plan, which is typically created for strengthening the ability of this Board in order to provide immunity to the stockholders of APP.

The Stockholder Rights Plans: A Response to Accretion of Outstanding Common Stock

American Apparel Inc (NYSEMKT:APP) adopted this Stockholder Rights Plans as an answer to the rapid accretion of outstanding common stock of the company. The company said that according to the special committee, this plan will be a vital tool for ascertaining that the stockholders of American Apparel are fairly treated. The decision is said to be a result of the SEC filing of Dov Charney on June 28, 2014. In the filing, he had voiced out about his intention of acquisition of influence or control over APP. The company had earlier dangled him on the account of investigation going on for misconduct.

The Plan Limits Anyone from Seizing Control over APP

The company explained that the plan will help in putting a halt to the people from taking seizure of control over this company without even suitably paying off the damages to the stockholders. The Rights Plan is aimed at empowering the stockholders and the Board with time, to make right and well-informed judgements.

Highlights of the Plan

At first, the rights shall remain attached to the shares of company’s common stock and will be represented by way of certificates that in turn stand for this common stock. With each right, every shareholder will enjoy the entitlement of purchasing one ten-thousandth part of the share belonging to preferred stock at exercise price of $2.75.

This will be however, subject to adjustments as mentioned in Stockholder Rights Plans. The rights plan of the company is said to be same as the other plans which are adopted by other publically-held companies. The rights plan has been adopted by the Special Committee of  American Apparel Inc (NYSEMKT:APP)’s Board only after the evaluation as well as consultation which took place with the financial as well as legal experts from outside.

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email ([email protected]) or his Google+ page (https://plus.google.com/103338576216002376250).



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