SOURCE: Izard Nobel LLP

August 30, 2010 15:35 ET

Izard Nobel LLP Announces Class Action Lawsuit Against American Apparel, Inc.

WEST HARTFORD, CT--(Marketwire - August 30, 2010) - The law firm of Izard Nobel LLP, which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the Central District of California on behalf of purchasers of the common stock of American Apparel, Inc. ("American Apparel" or the "Company") (NYSE Amex: APP) between December 20, 2006 and August 17, 2010 (the "Class Period"). 

The Complaint charges that American Apparel and certain of its officers and directors violated federal securities laws. Specifically, defendants falsely stated that they made "diligent efforts" to comply with employment and labor regulations and made false statements regarding the effect of the Company's illegal hiring practices on its operating costs and margins. Beginning in July 2009, after the Company revealed that it was being investigated by U.S. Immigration and Customs Enforcement regarding its compliance with immigration law, the true financial condition of the Company began to be revealed. However, defendants assured investors that such investigation would not have a material effect.

On August 17, 2010, the Company announced an expected loss of $5 million to $7 million in the second quarter of 2010 on net sales of $132 million to $143 million. According to the Company, a significant factor in such losses was lower labor efficiency at production facilities which was primarily a result of the hiring of over 1,600 net new manufacturing workers during the second quarter.

If you are a member of the class, you may, no later than October 25, 2010, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members.

While Izard Nobel LLP has not filed a lawsuit against the defendants, to view a copy of the Complaint initiating the class action or for more information about the case, and your rights, visit: www.izardnobel.com/americanapparel/, or contact Izard Nobel LLP toll-free: (800)797-5499, or by e-mail: firm@izardnobel.com. For more information about class action cases in general, please visit our website: www.izardnobel.com.

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