“Addressing the nearest-term maturity removes an overhang in a challenging market environment and provides the company a clear and more confident path to execute its business plan.”Įaton, Highland and their co-plaintiffs are represented by Sigmund Wissner-Gross and Robert Stark of Brown Rudnick. The Best Memorial Day Sales 2023: Sephora, Nordstrom Rack, Wayfair, Kate Spade, Coach, J.Crew, and More Take 50 off Fenty Beauty by Rihanna, shop 50 off deals on Ulta hair products, save on. “As previously announced, the company views these transactions as strategically important to its overall effort in positioning the company for long-term success,” the unsigned statement says. Crew did not respond to an email seeking comment, the company did issue a statement in February 2017 that announced plans to restructure its debt following the trademarks transfer. Crew Group’s brands from Term Loan Agreement Loan Parties to unsecured creditors of an upstream affiliate parent-affiliate to refinance that parent-affiliate’s obligations,” the complaint complaint states.Īlthough a spokesman from J. Crew Group hopes to transfer 100 percent of the value of the J. “Bottom line – the so called IP Transaction is the means by which the J. Crew Group is now attempting to stave off default by transferring its intellectual property to the Cayman subsidiary, then borrowing about $250 million against it, freeing up enough capital to restructure the debt that’s due in 2019. Now the company is facing about $2 billion dollars of debt, with $566 million due in 2019, as sales continue to diminish, according to the company’s fiscal report for 2016.Įaton and Highland say J. Crew became a popular brand internationally and its clothing was promoted by former first lady Michelle Obama, who famously talked about the brand on “The Tonight Show” in 2008 while her husband was still a presidential candidate. By the 1980s, the company was doing most of its business through catalog sales and its first retail store location opened in 1989. Crew was first established in 1947 as a women’s clothing company called Popular Merchandise that sold products through at-home demonstrations, according to the company’s website.
Crew’s transfer of intellectual property to a subsidiary not purview to their loans was done to protect its brand in the event of a default, which not be far off. Crew Cayman is exempt from having to become a party to its parent’s $1.5 billion loan.Įaton, Highland Capital Management and roughly two dozen of their subsidiaries argue that J. Crew Cayman, a newly created subsidiary.Īs a foreign entity, J. Led by Eaton Vance Management, the June 22 complaint filed in Manhattan Supreme Court takes issue with the transfer six months ago of a 72.04 percent stake in the J.
Crew’s debt claim in court that the clothing line violated its loan agreement by shifting branding rights to a foreign subsidiary. MANHATTAN (CN) - A group of lenders that hold $1.57 billion of J.
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