American Apparel has hired new board directors to help the company get back on its feet following a $270 million loss.

The racy clothing line lost $270 million in 2010 and is $200 million in debt. It is now trying to recover following the replacement of former CEO Dov Charney.

Like Us on Facebook

New York-based hedge fund Standard General stepped in to rescue American Apparel by extending a $25-million loan to pay off debts.

The terms of the deal says 44 percent of the shares of American Apparel will now be controlled by Standard General and that the hedge fund company will get to name three new board members.

The proposed board includes Joseph Magnacca, chief executive of Radio Shack, Thomas Sullivan, director of Media General, Colleen Brown, director of TrueBlue Inc., and David Glazek, a partner with Standard General.

Meanwhile, Charney said that his termination was illegal and he is fighting to be reinstated. The former CEO even tried to have an alliance with Standard General, but the hedge fund has no plans of helping Charney get his job back.

Charney was removed from his position following a lawsuit filed by employees for harassment and misconduct. Whether or not he will be reinstated will be decided by three directors based on evidence and investigation.

During Charney's term, American Apparel faced multiple controversies for racy ads including one showing almost naked women in tempting positions and mannequins with pubic hair.

TagsAmerican Apparel, new directors, bunkruptcy