Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Retail & E-Commerce newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (August 25, 2020, 5:09 PM EDT) -- A Virginia bankruptcy judge confirmed J.Crew's Chapter 11 plan Tuesday, clearing the way for a $1.6 billion debt-for-equity swap after the clothier became one of the first major retailers to retreat into bankruptcy amid the coronavirus pandemic.
U.S. Bankruptcy Judge Keith L. Phillips approved J.Crew Group Inc.'s second amended restructuring plan in a hearing on Tuesday. The plan equitizes more than $1.6 billion in secured debt, provides a $400 million asset-based lending facility and gives J.Crew more than $400 million in new term loans, the company said in an announcement Tuesday afternoon.
J.Crew said that it expects to exit Chapter 11 in early September. Currently, the company operates 170 J.Crew retail stores, 141 Madewell stores and 170 J.Crew Factory stores, according to Tuesday's announcement.
"The confirmation of our plan of reorganization is another significant milestone in our path to transforming our business to drive long-term, sustainable growth for J.Crew and further advance Madewell's growth momentum," CEO Jan Singer said in a statement.
The company said the deal had "widespread support" among its stakeholders. Several parties have withdrawn their objections to the plan in recent days, including the official committee representing J.Crew's unsecured creditors, which withdrew its objection on Tuesday, court filings show.
The committee of unsecured creditors had challenged the liens of secured creditors in early August, saying that up to $30 million of the debtor's assets were not encumbered by the liens.
J.Crew filed for Chapter 11 protection on May 4, becoming the first major retailer to succumb to the coronavirus pandemic and the resulting business restrictions placed on nonessential operations. The company entered bankruptcy with 181 J.Crew stores.
A representative for J.Crew declined to comment beyond the company's news release.
J.Crew is represented by Ray C. Schrock, Ryan Preston Dahl, Candace M. Arthur and Daniel Gwen of Weil Gotshal & Manges LLP and by Tyler P. Brown, Henry P. Long III and Nathan Kramer of Hunton Andrews Kurth LLP.
Lazard is serving as J.Crew's investment banker and AlixPartners LLP is serving as restructuring adviser.
The case is In re: Chinos Holdings Inc. et al., case number 20-32181, in the U.S. Bankruptcy Court for the Eastern District of Virginia.
--Additional reporting by Vince Sullivan and Rick Archer. Editing by Alanna Weissman.
For a reprint of this article, please contact reprints@law360.com.
