JCP - Coronavirus Fallout: J.Crew Filed for Chapter 11 Bankruptcy Today
The COVID-19 crisis drove clothing retailer J.Crew to file for Chapter 11 bankruptcy protection early Monday morning. The preppy fashion veteran is not going out of business at this point, having reached debt restructuring agreements with its major lenders.
J.Crew has worked out a bankruptcy deal with its lenders, restructuring $1.65 billion of the company's long-term debt into equity. In other words, lenders including Anchorage Capital Group, GSO Capital Partners, and Davidson Kempner Capital Management have traded in their debt claims in return for substantial ownership of the company. The deal includes $400 million of debtor-in-possession financing to J.Crew, which allows the stores to keep the lights on during the debt restructuring period.
"We will continue all day-to-day operations, albeit under these extraordinary COVID-19-related circumstances," CEO Jan Singer said in a statement. "As we look to reopen our stores as quickly and safely as possible, this comprehensive financial restructuring should enable our business and brands to thrive for years to come."