The pressure keeps mounting for American Apparel to put itself on the auction block.

British buyout firm Lion Capital, at one time a major lender to the Los Angeles–based clothing label, recently sent a letter to the American Apparel board of directors urging them to look at various strategic options, including a sale, to help turn around the company that has a mountain of debt, according to the Wall Street Journal.

Lion Capital still has outstanding warrants to purchase 12 percent of American Apparel’s stock, which could give ousted Chief Executive Dov Charney a negotiating advantage to return to the company. Charney and New York hedge fund Standard General, control nearly 44 percent of American Apparel’s stock.

However, the American Apparel board has enacted a one-year stockholder rights plan, or “poison pill,” to prevent a takeover attempt by anyone who attempts to purchase more than 10 percent of the company’s stock or 0.1 percent of outstanding shares if they already own 10 percent of stock.

In addition, Lion Capital, which still has the right to nominate two people to the nine-person board of directors, wants to withdraw its nomination of Gene Montesano, the co-founder of Lucky Brand and of Civilianaire jeans, and replace him with Lyndon Lea, one of Lion Capital’s founders, who was on the American Apparel board until 2011.

Meanwhile, news reports noted that American Apparel has hired investment bank Moelis & Co. to explore strategic options.

Along that line, the American Apparel board said it received a bid on Dec. 22 from Irving Place Capital to acquire the Los Angeles clothing company for $1.30 to $1.40 a share. On Dec, 29, American Apparel stock was trading at around $1.05 a share.

American Apparel, which runs the largest apparel factory in the United States and has a fleet of 245 stores, is in a state of chaos right now. In June, the board suspended Charney from his job as president and chief executive, even though he founded the company in 1998. The board said it was conducting an investigation into his alleged misconduct and violations of company policy. The board hired FTI Consulting to conduct the investigation, concluding that Charney should not get his job back.

The board then turned around and appointed veteran Los Angeles apparel executive Paula Schneider to take over the top executive spot on Jan. 5.

Since then, Charney has been waging an aggressive campaign to return to the company that for years has been struggling financially. The brand’s net losses have totaled nearly $300 million in five years. For the first nine months of the fiscal year ending Sept. 30, net sales were $455.4 million with net losses totaling $40.8 million.

Following Charney’s firing, a group of 30 managers and directors wrote a letter saying they wanted the controversial founder to stay on in some capacity.