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J. Crew’s debtholders pushed back hard against a lawsuit the retailer launched to keep its intellectual property assets out of lender reach.

Term loan lender agent Wilmington Savings Fund Society told a New York court on Friday that J. Crew is not entitled to any of the relief it sought in its February complaint, wherein it asked for court approval of its decision to put 72 percent of the retailer’s U.S. trademarks, valued at $250 million, into a new subsidiary out of reach of the lenders.

Wilmington also denied J. Crew’s allegations that the lenders have done anything to hinder its attempt to turn a value on the assets, and asked the court to reject the claims entirely, adding that the IP at issue belongs to the lenders as a term of a 2011 loan agreement.

At the same time, Wilmington lobbed its own legal claims against the retailer, purportedly in an effort to put an end to “ongoing efforts” by J. Crew’s owners to “improperly advance [their] self-interest over the interest of J. Crew and its creditors.”

Wilmington characterized J. Crew as “an insolvent clothing retailer” that owes more than $1.5 billion to the term loan lenders, and said the effort to carve out the J. Crew trademark and other brand IP is nothing more than an attempt to “expropriate” their value for the benefit of the company owners and its indirect parent, Chinos Intermediate Holdings A Inc., as they attempt to restructure another $500 million in PIK debt.

While J. Crew said in its complaint that the term loan lenders are keeping the company from “realizing the benefits” of its IP move, Wilmington said Friday that there are actually no financial benefits to be realized given the retailer’s plans and current financial position.

In recent financial filings, Wilmington said J. Crew has proposed nothing more than creating “hundreds of millions of dollars of new debt” through newly formed subsidiaries in order to pay down the PIK loan, while offering up the now separated IP assets as collateral, despite Holdings A having no rights to it.

“Instead this property was always owned by borrowers and guarantors of the term loans and is now owned by a wholly owned subsidiary of a guarantor of the term loans,” Wilmington argued.

The agent went on to claim that J. Crew has already violated “numerous provisions” of the loans, all of which count as automatic default events, and that the attempt to separate its IP assets should be considered a fraudulent transfer.

“Accordingly, WSFS is entitled to have any transfer of the trademarks set aside,” Wilmington added.

With that, Wilmington asked the court to declare J. Crew in default, allowing the agent to “exercise any and all rights and remedies” in the loan agreements.

A spokeswoman for J. Crew said of Wilmington’s allegations: “The meritless counterclaims filed by WSFS in reaction to J. Crew’s complaint – including distracting claims of “default” – neither undercut nor diminish J. Crew’s pending action to confirm that its December 5, 2016 IP transaction fully complied with governing loan agreements. J. Crew is in compliance with all obligations under those agreements and will remain in compliance throughout the pendency of its litigation with WSFS. J. Crew looks forward to resolution of its claim so that it can continue to improve its business and pursue value-maximizing transactions for the benefit of the company and all stakeholders.”

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