J Crew has become the first major US retailer to file for bankruptcy protection since the coronavirus lockdown was enforced.
The fashion chain, which operates more than 500 stores, made the Chapter 11 filing to buy itself some breathing space from creditors.
Chapter 11 protection acts in a similar way to a company voluntary arrangement (CVA) in the UK, postponing a US company’s financial obligations to creditors to give it time to refinance or sell parts of the business.
J Crew plans to hand control to its lenders, including the hedge fund Anchorage Capital Group, Blackstone-owned GSO Capital Partners, and Davidson Kempner Capital Management, in exchange for the cancellation of $1.65bn (£1.3bn) of debts.
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