A group of investors allied with controversial American Apparel founder Dov Charney has made an offer to acquire the bankrupt company for $300 million that they said was superior to its restructuring plan.

Hagan Capital Group and Silver Creek Capital Partners said that under their proposal, American Apparel would exit bankruptcy with about $160 million of liquidity and new equity. The proposal includes $90 million of new equity and $40 million of a new term loan.

American Apparel announced Monday its shareholders had approved its bankruptcy organization, setting up a possible showdown with the Hagan investors at a court hearing next week.

The restructuring would swap about $200 million worth of debt for equity, bringing the retailer out of bankruptcy under the control of its lenders and effectively wiping out shareholders. Charney is American Apparel’s biggest shareholder.

The “debtor’s plan is not feasible and will lead to poor long-term recoveries for the company’s stakeholders and put thousands of manufacturing jobs in Los Angeles at risk,” the investor group said.

“American Apparel evaluates all bids consistently, and in the ordinary course,” according to an American Apparel spokesperson. “The company remains focused on pursuing the completion of its financial restructuring following its planned bankruptcy court hearing at the end of this month. ”

American Apparel ousted Charney as CEO in December 2014, six months after suspending him for alleged misconduct. Last month, he announced he had hired Cardinal Advisors to assist in him lining up investors that would keep him involved with the company.

Chad Hagan, managing partner of Hagan Capital, told the Wall Street Journal that Charney’s removal was “a shortsighted mistake” and that American Apparel is a “viable business model that needs to be scaled from a sales point of view and should not be in bankruptcy.”

For the investor group’s bid to succeed, debt holders “must accept it, or [Charney] must convince the bankruptcy judge to implement it anyway if it offers creditors and shareholders a better deal than the existing plan,” Fortune said.

A lawyer for the official committee of unsecured creditors said he was studying the Hagan proposal.

“From [the] unsecured creditors’ side the amount of money they put on the table is interesting, but the devil is always in the details,” David Posner told Reuters.

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