American Apparel Says It's Running Out of Cash

American Apparel Inc. said Tuesday it does not expect to have enough funds to run the company for the next 12 months and warned it may not be able to raise additional capital, Reuters reported.

The company, which is being sued by founder and former CEO Dov Charney, said it could breach covenants related to a credit facility.

American Apparel said it was in talks with the lender -- Capital One Business Credit Corp -- to waive the non-compliance, but said there could be no guarantee of a waiver.

Failure to obtain a waiver could have an "adverse effect" on its financial condition, the company said.

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