GOING CONCERN: American Apparel Inc. has warned that it may not have enough liquidity to continue to operate for the next year. The L.A. manufacturer and retailer said it expects losses from operations to continue through at least the third quarter. The company has been hurt by slumping sales and production problems after having to lay off employees whose immigration papers were not in order. In addition, two regulators are investigating the company’s change in accounting firms in July.
BRICK-AND-MORTAR BOOST: Los Angeles City Councilman Richard Alarcon has introduced a motion calling for a report on how to make restaurants more competitive with about 4,000 food trucks that park on city streets. The report, which is to be submitted to the Jobs & Business Development Committee, will include proposals for decreasing the business tax rate for restaurants, creating a Dine LA campaign and allowing restaurants to set up sidewalk tables.
DOLL HOUSE: MGA Entertainment Inc. in a court filing has accused rival toymaker Mattel Inc. of fraudulently entering private showrooms so it could steal trade secrets and confidential information. MGA, the Van Nuys toymaker that’s in a long-running dispute with Mattel over ownership of the Bratz doll line, alleges that some employees of Mattel, the El Segundo maker of the Barbie franchise, misrepresented themselves to gain entry into showrooms of rivals such as MGA, thereby acquiring a competitive advantage. Mattel responded that its rival was attempting to deflect attention from MGA’s own wrongdoing. A new trial in the Bratz case is set for January.
BROAD MUSEUM: Los Angeles County supervisors have approved a plan to allow billionaire Eli Broad to build a museum for his contemporary art collection in downtown Los Angeles. The board voted unanimously to lease a 2.5-acre parcel of county-owned land to Broad for the museum. The lease also must be approved by a committee of state and local officials, with a vote scheduled Monday. Broad was still considering a site in Santa Monica.
CHAPTER 11: Apex Digital Inc., a Walnut maker and distributor of inexpensive TVs, DVD players and other electronics products, has filed for voluntary Chapter 11 bankruptcy. The company said its restructuring plan is aimed at modifying its business to focus on its green-energy lighting products line. The company, known for supplying low-cost Chinese-made televisions to Wal-Mart and other U.S. retailers, made headlines when its chief executive, David Ji, was held by Chinese authorities in 2004-05 in a billing dispute with one of its suppliers.
LOAN AID: City National Bank has reported it will pay half of the standard fees associated with federally backed small-business loans in an effort to boost small-business lending. The L.A. bank will pay up to $3,000 toward U.S. Small Business Administration loan fees for loan applications submitted by Sept. 10 and funded by Dec. 31. The SBA reduced or waived certain fees as part of last year’s stimulus package, but lending dropped 70 percent after the aid expired earlier this year.
HARD TIME: Benny and Nissan Pirian, two brothers who own four L.A. carwashes, have each been sentenced to a year in prison and ordered to pay $1.25 million in unpaid wages to 54 workers, in a plea with the City Attorney’s Office. The Pirians each pleaded no contest to a half-dozen criminal counts, including conspiracy and grand theft. Prosecutors said workers received wages well below federal and state minimums, worked under substandard conditions, and were threatened when they reported the violations and tried to unionize.
OBITUARY: Edmund Shea Jr., a pioneering investor who also co-founded residential construction giant Shea Homes in Walnut, died of pulmonary fibrosis at his home in San Marino. He was 80. In the 1960s, Shea helped establish the construction company that would become Walnut-based Shea Homes, one of the nation’s largest homebuilders. Before that, Shea had provided early stage capital for Hambrecht & Quist, which became a prominent San Francisco technology investment banking firm, and he made early investments in hundreds of startups including Activision, Adobe and Genentech.
MONKEY BUSINESS: Media mogul Haim Saban’s Saban Brands has acquired Paul Frank Industries, a Costa Mesa apparel and accessory company best known for pasting its Julius the monkey character on products ranging from T-shirts to stationery. Saban Brands, an affiliate of Century City-based Saban Capital Group Inc., is planning to create content for the Paul Frank brand and the more than 150 characters in the company’s design portfolio. Terms of the deal were not disclosed.
FUND CLOSES: Kennedy Wilson has raised $125 million for its KW Property Fund III from investors, including university endowments, public funds and foundations. The Beverly Hills real estate investment and services firm, which manages a 40 million-square-foot portfolio of commercial and multifamily residential real estate, said the now-closed fund is targeting equity and debt investment opportunities on distressed properties on the West Coast and Hawaii.
EARNINGS: Green Dot Corp. reported second quarter net income of $4.6 million, 18 percent higher than a year earlier. Operating revenue rose 44 percent to $90.3 million. … Hot Topic Inc. reported a second quarter net loss of $6.3 million, 97 percent wider than a year earlier. Revenue fell 5 percent to $150 million. … Superior Industries International Inc. reported second quarter net income of $10.1 million compared with a loss of $21 million a year earlier. Revenue rose 141 percent to nearly $195 million. … Cereplast Inc. reported a second quarter loss of $1.7 million, 62 percent wider than a year earlier. Revenue fell 24 percent to $684,431.
CORRECTION: The Aug. 2 Advertising & PR column incorrectly stated the name of Marty Turman, multicultural marketing director at Harrah’s Entertainment. Also, agency Walton Isaacson is now based on Miracle Mile.
