American Apparel’s amended plan of reorganization has been confirmed by the bankruptcy court. Under the plan, the company’s secured lenders will convert $230 million of debt into equity.

The plan of reorganization has been confirmed by the U.S. Bankruptcy Court for the District of Delaware. With the court’s approval, the company is now focused on exiting chapter 11 and fully implementing its strategy.

Once the plan becomes effective, the company’s secured lenders will convert $230 million of secured debt into equity, provide $40 million of exit financing, in the form of debt and equity, and provide a $40 million asset-backed loan. This $80 million of incremental liquidity will support the turnaround plan, and interest expense will decrease by $20 million. Additionally, the company will become privately-held.

Under the plan approved by the judge, American Apparel would be taken over by its lenders, including Monarch Alternative Capital, Coliseum Capital and Goldman Sachs Asset Management.

American Apparel’s legal advisor in connection with the restructuring is Jones Day. FTI Consulting serves as its restructuring advisor, and Moelis & Company serves as its investment banker for the restructuring.

Paula Schneider, American Apparel’s CEO, commented, “The confirmation of our plan is a great accomplishment for American Apparel. This is a new day for the company, and a positive outcome for our customers, vendors and employees. With this milestone behind us, we are now fully focused on executing our turnaround strategy as we continue working to drive revenue across our wholesale, retail and e-commerce businesses; create innovative, new and relevant products; launch new design and merchandising initiatives; and continue to deliver innovative and inclusive award-winning marketing campaigns.”