Next Week in Bankruptcy

Wednesday, American Apparel Inc. will head to the Wilmington, Del., court to seek approval of its bankruptcy-exit plan, where it will face off with ousted Chief Executive Dov Charney.

Mr. Charney is working with two investors, Hagan Capital Group and Silver Creek Capital Partners, who put forth a rival $300 million buyout offer for the company. The bid proposes an injection of $130 million, including $90 million of new equity and a new $40 million term loan.

Friday, people familiar with the situation said American Apparel rejected the rival bid, though they said negotiations are still ongoing and any revisions to the offer could still be reviewed before Wednesday’s hearing.

They added that Mr. Charney’s involvement is one reason for the bid’s rejection and that a revised bid would likely have to address that and would possibly need to provide more capital.

American Apparel’s creditors have already voted in favor of the company’s chosen exit plan, which proposes to swap about $200 million worth of debt for equity. The plan would wipe out shareholders, including its largest, Mr. Charney, also American Apparel’s founder.

Mr. Charney is expected to appear in court Wednesday after having received permission to call several witnesses to the stand; he hopes to adjourn the confirmation hearing in order to allow for more time to review the opposing bid.

The feud between Relativity Media LLC’s founder Ryan Kavanaugh and the Hollywood film studio’s former turnaround consultant, FTI Consulting , will be brought in front of a Manhattan bankruptcy judge Wednesday.

In December, the rocky relationship was made public when FTI’s Brian Kushner filed court papers describing issues with the founder before and after Relativity filed for bankruptcy on July 30, as well as through a subsequent sale process. Mr. Kushner alleges that Mr. Kavanaugh delayed efforts “to adequately prepare for bankruptcy.”

Mr. Kavanaugh’s lawyer, however, has outlined “multiple missteps” FTI allegedly made regarding Relativity’s film business. His lawyer alleges the firm favored the studio’s television business over its film unit and made decisions without consulting Relativity’s board, as was required. Mr. Kavanaugh has since terminated FTI’s services, according to court papers.

The dispute publicly came to light as Relativity’s creditors vote on a bankruptcy-exit plan that would see Mr. Kavanaugh and another investor take control of the film studio by trading about $175 million of the company’s debt for equity. Relativity’s television studio was spun off and sold to Relativity’s lenders. The bankruptcy-exit plan is expected to go before a judge for approval early this year.

The saga of Tom Petters, the Minnesota businessman who was convicted of orchestrating a Ponzi scheme, continues in a St. Paul court on Tuesday when a $15 million settlement will be considered by Judge Gregory F. Kishel.

This new settlement was presented by bankruptcy trustee Douglas Kelley to settle clawback litigation that he brought more than five years ago against WestLB, a German bank that helped fund transactions between Mr. Petters’s companies and a big investor. WestLB has agreed, in order to be freed of a lawsuit seeking more than $140 million, to return $15 million.

The bankruptcy trustee has been overseeing the liquidation of Petters Co., Petters Group Worldwide LLC and other companies under the Petters umbrella since late 2008. Mr. Petters, whose business empire once included Polaroid and Sun Country Airlines, told investors their capital would finance his companies’ purchase of electronic equipment from big-box retailers like Costco and Sam’s Club. However, the purchase orders and orders didn’t exist, and Mr. Petters had repaid his early investors with other investors’ money, the hallmark of a Ponzi scheme.

-Jacqueline Palank contributed to this article.

Write to Lillian Rizzo at [email protected]. Follow her on Twitter @Lilliannnn