J.Crew Debt Restructuring Was Prosecuted By Two Creditors

According to the world clothing shoes and hats net,

Group Inc.'s debt restructuring plan introduced in the middle of this month was resisted after the majority of creditors agreed.

Senior creditors Eaton Vance Management and Highland Capital Management LP filed a lawsuit against the Supreme Court of New York asking J.Crew Group Inc. to halt the restructuring plan that they claimed would damage their interests.

J.Crew Group Inc. seeks to convert a $566 million 600 thousand cash payment bill that expires in May 2019 to equity and a bond that matures in 2021. This 250 million of new bonds is held by J.Crew.

Intellectual property rights subsidiaries are issued with J.Crew intellectual property rights as collateral.

The group is also willing to provide compensation to the lender in exchange for the withdrawal of their lawsuit in the pfer of J.Crew brand intellectual property rights.

In May 2019, 88% creditors of the maturity bonds agreed to the scheme. J.Crew Group Inc. also believed that the imminent debt crisis had been solved. In July, it began to replace Millard Mickey Drexler as the new chief executive's James Brett for more than two years to reverse the sales decline and sustained losses of the group in the past 11 quarters, so as to avoid the group going bankrupt.

J.Crew Group Inc.2016 began to lay the foundation for debt restructuring in December and pferred the J.Crew brand intellectual property to the offshore subsidiaries of the Cayman Islands. At that time, some creditors thought that the move was in addition to the pledge of the loan and threatened to declare J.Crew Group Inc. debt default. J.Crew Group Inc. preempted the accused against the creditors in February this year.

The terms of the debt restructuring programme two weeks ago have ensured that creditors no longer challenge any legal challenge to intellectual property pfer.

However, Eaton Vance Management and Highland Capital Management LP still believe that J.Crew Group Inc. does not have the right to split intellectual property rights and mortgage intellectual property rights to primary creditors without the unanimous support of creditors. They request the judge to grant provisional injunction to the Shirley.

It is reported that judge Shirley Kornreich will hold a hearing on Wednesday.

In the past few months, the bond price of J.Crew Group Inc. lower level bonds has risen from $0.35 to $0.67, which is much more than that of the senior bond bond price of $0.60.

Moody s Corp. analyst Moodie Raya believes that the above pactions help J.Crew Group Inc. reduce leverage, but the group's cash will be weakened by IP authorization fees.

Michael Nicholson, President, chief operating officer and chief financial officer of J.Crew Group Inc., pointed out that the plan was the result of intense deliberations and consultations in the past months. It can not only solve the problem of debt maturity in the most challenging market environment, but also clear the way for the implementation of the business plan, which is crucial for the long-term success of the group in the two years.

J.Crew Group Inc. major shareholder and chairman Mickey Drexler as of April 29th, J.Crew Group Inc. has net cash of $104 million 600 thousand, an increase of 91.2% compared with the same period last year 54 million 700 thousand, the total debt of 1 billion 503 million dollars, is 56 times the adjusted EBITDA 2660 million in the first quarter.

The huge debt was mainly formed by private Holdings Company TPG Capital LP and Leonard Green & Partners LP in 2011 with its $3 billion purchase of leveraged buy-out, and TPG Capital LP and Leonard LP & amp; even further allowed the company to further lend $787 million to pay dividends.

Mickey Drexler also has a stake of about 10%, which is the largest individual investor of the group.

Data show that in the first quarter of this fiscal year, J.Crew Group Inc. recorded a huge decline of 9% on the basis of a 7% decline in the same store last year, extending the decline since the three quarter of fiscal 2015.

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J.Crew and

The two brands continue to take their own course, accounting for 12% of the group's revenue, which is more than 80%, while the continued strong Madewell growth rate is 10%.

Group revenues totaled $532 million, down 6.3% from a year earlier, J.Crew fell 10.9% to $428 million 500 thousand, and Madewell rose 16.9% to 84 million 680 thousand US dollars.

The net loss expanded from $8 million 41 thousand in the same period last year to $123 million 300 thousand, including the impairment loss of goodwill in the J.Crew brand 129 million 800 thousand dollars and the severance payment in April, which announced the reduction of 10 million 700 thousand jobs in 250 jobs.

Mickey Drexler expressed disappointment at its profit in its first quarter earnings yesterday, but pointed out that it is optimistic about improving its business.

These include the layoffs mentioned above, as well as the restructuring of the C prefix management team -- Michael Nicholson, the group's president, COO and CFO's three important positions, and the managing J.Crew brand, J.Crew brand President Libby Wadle pferred to the Madewell brand president.

In recent years, the high-end Collection series deviating from customer demand, the normalization of discounts and the disproportionate product quality with the price have accelerated the loss of core customers of J.Crew brand.

J.Crew Group Inc. has decided to cut down the price of the 300 products, re create the image of people closer to people and invest in digital marketing.

Last week, J.Crew Group Inc. announced that the 72 year old Mickey Drexler will only serve as chairman of the board of directors from next month to end the 14 year long group CEO career. Jenna Lyons, the former president and creative director of the group two, has announced that it will quit before the end of the year after 26 years of service. This has also confirmed the announcement of the end of the J.Crew Group Inc. era.

As of June 12th, the group had 278 J.Crew retail outlets, 117 Madewell stores and 178 factory shops, including 39 J.Crew Mercantile stores.

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