J Crew Group has won court approval for its plan to shed debt and handle control of the business to lenders. J Crew’s plan conforms to Federal bankruptcy rules. The retailer expects to officially exit bankruptcy in September. To do so, it will swap more than $1.6 billion of old secured debt for ownership in the company. The plan also provides for a new $400 million credit facility and will turn J. Crew’s bankruptcy loan into $400 million of term loans.
J Crew’s new owners will include Anchorage Capital Group LLC, Davidson Kempner Capital Management LLC and GSO Capital Partners LP. J Crew filed for bankruptcy in Virginia in early May The bankruptcy plan will wipe out equity stakes of TPG Capital LP and Leonard Green & Partners LP, which bought J. Crew in a 2011 leveraged buyout.
The company operates 170 J. Crew stores along 141 Madewell stores. Before furloughing most of its employees in April, the company employed about 13,000 around the world. The “vast majority” of its store associates had returned to work as of August 9, 2020.