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August 10, 2017

Milbank Advises Creditors in Complex Recapitalization Transactions by J. Crew

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Milbank, Tweed, Hadley & McCloy LLP has advised an ad hoc committee of certain financial institutions (the “Ad Hoc Committee”) holding loans under a $1.5 billion term loan facility (the “Term Loan Facility”) of J. Crew Group, Inc. (“J. Crew”), one of the nation’s premier clothing retailers, and 7.75%/8.50% Senior PIK Toggle Notes due 2019 (the “PIK Notes”) issued by Chinos Intermediate Holdings A, Inc. (“Chinos A”), the parent company of J. Crew, in connection with a multi-prong recapitalization of the J. Crew group of companies, significantly reducing the group’s debt burden and exchanging substantially all of the unsecured PIK Notes into secured debt obligations.

Milbank attorneys from the firm’s Financial Restructuring, Alternative Investments, Capital Markets, Corporate, Tax, and Litigation practice groups acted as counsel to the Ad Hoc Committee in connection with J. Crew’s concurrent (i) exchange of $566.5 million of the PIK Notes for $250 million of new senior secured notes issued by J. Crew’s domestic intellectual property-holding subsidiaries (collectively, “IPCo”), shares of Chinos Holdings, Inc.’s (the parent company of Chinos A) 7% non-convertible perpetual preferred stock having an aggregate initial liquidation preference of approximately $190 million, and shares of Chinos Holdings, Inc.’s common stock representing approximately 15% of its common equity, (ii) purchase by the Ad Hoc Committee of an additional $97 million of new senior secured notes issued by IPCo, and (iii) amendment to the Term Loan Facility pursuant to which, among other things, J. Crew purchased $150 million principal amount of term loans held by consenting lenders and the term loan administrative agent was directed to dismiss litigation relating to the assignment of certain US intellectual property rights. These transactions were an integral part of a larger corporate reorganization that included the transfer of certain rights in J. Crew’s domestic intellectual property assets to IPCo to secure the new notes issued in connection therewith.

Milbank attorneys included Dennis Dunne, practice group leader of the firm’s Financial Restructuring Group, Financial Restructuring partner Sam Khalil and associate Matthew Brod; Alternative Investments partner Al Pisa, special counsel John Britton and associate Brian Lee; Capital Markets partner Paul Denaro, special counsel Sam Badawi and associate Alex Gefter; Corporate partner Scott Golenbock and associate Kevin Begley; Tax partner Russell Kestenbaum; and Litigation partners Chris Gaspar, Andy Leblanc and Aaron Renenger, special counsel Kristin Yohannan and associate Ryan Hagglund.