NEW YORK (TheStreet) -- American Apparel (APP) filed for Chapter 11 bankruptcy protection, but its retail operations in the U.S. will continue. A restructuring program will exchange about $200 million in bonds into equity, cutting the teen fashion retailer's debt to $135 million. The company has not turned a profit since 2009.

  • The probe at Volkswagen (VLKAY) on how the cheating emissions test scandal was possible is zeroing in on two top engineers at the company, the Wall Street Journal wrote quoting sources. The two men, Ulrich Hackenberg, Audi's chief engineer, and Wolfgang Hatz, developer of Porsche's winning Le Mans racing engines, did not reply to the newspaper's requests for comment. The paper said they found they could not deliver as promised on clean diesel engines for the U.S. market.
  • Portugal's center-right ruling coalition lost its majority in parliament in Sunday's elections, and Prime Minister Passos Coelho said he will speak with the opposition Socialists, who came in second in the polls, to try to form a minority government. This would be less stable and less able to implement reforms.
  • The U.K. government said it plans to exit Lloyds Banking Group (LYG) by selling its full stake over the coming months, and it will sell a stake of at least 2 billion pounds ($3 billion) to retail investors with a discount of 5% to the market place. The sale is likely to take place in March next year.
  • Former Federal Reserve Chairman Ben Bernanke said that more executives should have faced prosecution for the 2008 crisis, according to an interview with the USA Today quoted by Reuters. "It would have been my preference to have more investigation of individual action, since obviously everything that went wrong or was illegal was done by some individual, not by an abstract firm," Bernanke told the paper.