American Apparel Seeks Bonuses Amid Chapter 11 Shakeup As Workers Quit

American Apparel Inc. has sought permission from a bankruptcy court to offer bonuses to employees in key positions in an attempt to stem the steady flow of executives jumping ship, according to the Wall Street Journal, after the struggling fashion retailer filed for Chapter 11 in October.

American Apparel proposed it would pay up to $2.3 million in retention bonuses in hopes that the extra cash would incentivize workers to stick with the embattled company as it emerges from bankruptcy. The clothing maker said in court papers filed Friday, that it had lost 30 corporate employees and 6 percent of its retail staff since it filed for bankruptcy protection, the Journal reported.

The company has also reportedly asked the court to allow it the use of insurance money to pay for the various lawsuits against the company and its executives filed by founder and ousted former chief executive Dov Charney.

American Apparel has been at the center of a bitter boardroom battle with Charney since last year when the ex-CEO was fired after an internal investigation into potential misconduct, including allegations of sexual harassment.

The retailer, known for its made-in-the-U.S. fashion products, entered a debt-reorganization program in early October under which more than $200 million of bonds will be exchanged for stock in the company.

The U.S. Bankruptcy Court in Wilmington, Delaware, is scheduled to take up the issue of retention bonuses at a Nov. 19 hearing, the Journal reported.

American Apparel said it intends to keep most of its 200 stores around the world open through the restructuring.