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American Apparel has suffered yet another devastating blow, and this time it’s something the company may not be able to bounce back from. No, American Apparel isn’t done, but it has filed for bankruptcy protection.

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As of this morning, the board approved the filing, so American Apparel took to a Delaware court to make it official. A deal was struck with the majority of the company’s lenders, which sees the company trading its debt for equity in the company.

And the company needs that debt to go away, somehow, because in its second quarter, sales were down 17 per cent. And over the last five years, the company has seen losses of $340 million. This year? The losses have already reached a staggering $45 million. Seems taking out nipples from images and creating three generic customer profiles weren’t enough.

And yet, despite hemorrhaging like a slasher victim, the company has been saved to fight for yet another day.

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To survive, AA has gotten rid of its current shareholders (a condition of the bankruptcy), of which former CEO and founder Dov Charney is one. Without shareholders to call the shots, the company is now controlled by its creditors: hedge fund Standard General, and four other undisclosed, moneyed angels.

This feels like one last shot – a final, last-ditch effort to sell sexy lame leotards to teens who are increasingly more fickle than they have ever been. But Charney’s replacement, Paula Schneider, is hopeful: “Not having the nuisance lawsuits, not having this massive debt, these are all extremely important things for the company to thrive.”

Good luck, and godspeed.