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Who’s Who in the Chino Holdings / J.Crew Bankruptcy

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Chinos Holdings, Inc. designs apparel. It offers clothing for men, women and children, as well as accessories. Chinos Holdings serves customers worldwide.

Chinos Holdings, Inc. and its affiliates, including J.Crew Group, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 20-32181) on May 4, 2020.

At the time of the filing, the Debtors were each estimated to have assets of between $1 billion and $10 billion and liabilities of the same range.

Judge Keith L. Phillips oversees the cases.

Creditors’ Committee Members Disclose Claims

In the Chapter 11 cases of Chinos Holdings, Inc., et al., the law firm of Jones Day submitted a verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose that it is representing the Ad Hoc Committee.

The Ad Hoc Committee of certain beneficial holders, or investment advisors or managers for the account of beneficial holders, of term loans under the Amended and Restated Credit Agreement, dated March 5, 2014, among J. Crew Group, Inc., Chinos Intermediate Holdings B, Inc., the lenders party thereto, and Wilmington Savings Fund Society, FSB as successor administrative agent, 13.00% Senior Secured Notes due 2021 and 13.00% Senior Secured New Money Notes due 2021 issued by J.Crew Brand Corp. and J. Crew Brand, LLC under the two Indentures dated July 13, 2017 to which U.S. Bank National Association acts as collateral agents and indenture trustees, Series A Preferred Stock issued by Chinos Holdings, Inc., and/or common stock issued by Holdings.

In April 2019, the Ad Hoc Committee retained Milbank as counsel. From time to time thereafter, certain holders of Term Loans, IPCo Notes, Chinos Series A Preferred Stock, and/or Chinos Common Stock have joined the Ad Hoc Committee. In April 2020, the Ad Hoc Committee retained Tavenner & Beran as Virginia counsel.

Counsel represents the Ad Hoc Committee and does not represent or purport to represent any entities other than the Ad Hoc Committee in connection with the Debtors’ chapter 11 cases. In addition, neither the Ad Hoc Committee nor any member of the Ad Hoc Committee represents or purports to represent any other entities in connection with the Debtors’ chapter 11 cases.

As of May 15, 2020, members of the Ad Hoc Committee and their disclosable economic interests are:

Anchorage Capital Group, L.L.C.
610 Broadway, 6th Floor
New York, NY 10012

* Term Loans: $720,551,694.54
* IPCo Notes: $129,993,000.00
* Chinos Series A Preferred Stock: $57,630,197.00
* Chinos Common Stock: 4,834,102 shares
* DIP Commitments: $140,000,000.00

Angelo, Gordon & Co., L.P.
245 Park Avenue, 26th Floor
New York, NY 10167

* IPCo Notes: $30,381,000.00
* DIP Commitments: $50,000,000.00

Antora Peak Capital Management LP
5700 W 112th St., Suite 500
Overland Park, KS 66211

* Term Loans: $34,972,266.72
* IPCo Notes: $4,000,000.00
* Chinos Series A Preferred Stock: $13,000,000.00
* Chinos Common Stock: 665,131 shares
* DIP Commitments: $5,900,000.00

Citadel Equity Fund Ltd.
601 Lexington Avenue
New York, NY 10022

* Term Loans: $62,719,188.00
* DIP Commitments: $25,000,000.00

Davidson Kempner Capital Management LP
520 Madison Avenue, 30th Floor
New York, NY 10022

* Term Loans: $79,011,822.83
* DIP Commitments: $80,000,000.00

FS Global Credit Opportunities Fund
201 Rouse Boulevard, 3rd Floor
Philadelphia, PA 19112

* Term Loans: $12,286,464.00
* IPCo Notes: $33,259,000.00
* Chinos Series A Preferred Stock: $18,651,132.00
* Chinos Common Stock: 1,068,652 shares
* DIP Commitments: $30,000,000.00

GSO Capital Partners LP
345 Park Avenue
New York, NY 10154

* Term Loans: $59,633,256.30
* IPCo Notes: $93,206,000.00
* Chinos Series A Preferred Stock: $52,122,929.05
* Chinos Common Stock: 4,523,836.26 shares
* DIP Commitments: $51,400,000.00

LibreMax Capital, LLC
600 Lexington Avenue,
7th Floor
New York, NY 10022

* Term Loans: $54,667,338.00
* DIP Commitments: $17,700,000.00

Co-Counsel to the Ad Hoc Committee can be reached at:

Lynn L. Tavenner, Esq.
Paula S. Beran, Esq.
David N. Tabakin, Esq.
TAVENNER & BERAN, PLC
20 North Eighth Street, Second Floor
Richmond, VA 23219
Telephone: (804) 783-8300
Facsimile: (804) 783-0178
E-mail: ltavenner@tb-lawfirm.com
pberan@tb-lawfirm.com
dtabakin@tb-lawfirm.com

– and –

Dennis F. Dunne, Esq.
Samuel A. Khalil, Esq.
Matthew L. Brod, Esq.
MILBANK LLP
55 Hudson Yards
New York, NY 10001-2163
Telephone: (212) 530-5000
Facsimile: (212) 530-5219
E-mail: ddunne@milbank.com
skhalil@milbank.com
mbrod@milbank.com

A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/QY4xsW

Taps Weil Gotshal as Lead Counsel

Chinos Holdings, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Weil, Gotshal & Manges LLP as their legal counsel effective May 4.

The firm will assist Debtors in the preparation of a Chapter 11 plan and will provide other legal services in connection with their Chapter 11 cases.

Weil’s hourly rates are as follows:

Members and Counsel $1,100 – $1,695
Associates $595 – $1,050
Paraprofessionals $250 – $435

During the 90 days prior to Debtors’ bankruptcy filing, Weil received payments and advances totaling $11,858,229.

The following is provided in response to the request for additional information pursuant to the Appendix B-Guidelines .

1. Weil did not agree to a variation of its standard or customary billing arrangements for its employment with Debtors,

2. No professional at Weil varied his rate based on the geographic location of Debtors’ bankruptcy cases.

3. Weil was engaged by Debtors in the 12 months prior to their bankruptcy filing. From April 2019 through September 2019, Weil’s hourly rates were $1,050 to $1,600 for members and counsel, $560 to $995 for associates, and $240 to $420 for paraprofessionals. In October 2019, the firm adjusted its standard billing rates for its professionals in the normal course.

4. Weil is developing a prospective budget and staffing plan and will review such budget with Debtors.

Ray Schrock, Esq., a member of Weil, disclosed in court filings that the firm is a “disinterested person” within the meaning of Section 101(14) of the Bankruptcy Code.

The firm can be reached through:

Ray C. Schrock, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
Email: ray.schrock@weil.com

Taps Hunton Andrews as Co-Counsel

Chinos Holdings, Inc. and its affiliates received approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Hunton Andrews Kurth, LLP in connection with their Chapter 11 cases.

Hunton Andrews will serve as co-counsel with Weil, Gotshal & Manges LLP, Debtors’ lead bankruptcy counsel.

The hourly rates for the attorneys and paralegal who are expected to handle the cases are as follows:

Tyler Brown, Partner $970
Justin Paget, Counsel $660
Henry Long, III, Associate $655
Nathan Kramer, Associate $565
Jennifer Wuebker, Associate $525
Tina Canada, Paralegal $270

Hunton received the sum of $340,000 from Debtors as retainer. As of May 4, the firm holds $164,299.14 of the retainer.

The following is provided in response to the request for additional information pursuant to the Appendix B-Guidelines:

(i) Hunton did not agree to any variations from, or alternatives to, its standard or customary billing arrangements.

(ii) No professional at Hunton has varied or will vary his rate based on the geographic location of Debtors’ bankruptcy cases.

(iii) No adjustment was made to either the billing rates or the material financial terms of Hunton’s pre-bankruptcy employment by Debtors as a result of the filing of the Chapter 11 cases.

Tyler Brown, Esq., a partner at Hunton, disclosed in court filings that the firm is a “disinterested person” within the meaning of Section 101(14) of the Bankruptcy Code.

The firm can be reached through:

Tyler P. Brown, Esq.
Hunton Andrews Kurth, LLP
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, VA 23219
Telephone: (804) 788-8200
(804) 788-8674
Facsimile: (804) 788-8218
Email: tpbrown@HuntonAK.com

J. Crew Hires Quinn Emanuel as Special Counsel

J. Crew Operating Corp., an affiliate of Chinos Holdings, Inc., received approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Quinn Emanuel Urquhart & Sullivan, LLP as special counsel.

Quinn Emanuel will assist the review committee formed by Debtor to investigate claims or causes of action related to the transactions that it approved and executed on Dec. 2, 2016 and June 12, 2017.

The firm’s hourly rates are as follows:

Partners $745 – $1,595
Other Attorneys $625 – $1,270
Law Clerks/Legal Assistants $355 – $525

The attorneys who are expected to assist the review committee will be paid at hourly rates as follows:

Susheel Kirpalani, Partner $1,595
Eric Kay, Counsel $1,100
Daniel Holzman, Counsel $1,015
Jennifer Nassiri, Counsel $1,000
Zachary Russell, Associate $825
Stella Li, Associate $700

Quinn Emanuel received a retainer in the amount of $300,000.

The following is provided in response to the request for additional information pursuant to the Appendix B-Guidelines:

1. Quinn Emanuel and the review committee did not agree to a variation of the firm’s standard billing arrangements. The rate structure provided by the firm is appropriate and is not significantly different from the rates that it charges for other non-bankruptcy representatives, or the rates of other comparably skilled professionals.

2. No professional at Quinn Emanuel varied his rate based on the geographic location of Debtor’s bankruptcy case.

3. Quinn Emanuel followed the fee arrangement under its April 26 engagement agreement with Debtor.

4. Debtor has not approved a budget and staffing plan for Quinn Emanuel.

Susheel Kirpalani, Esq., a partner at Quinn Emanuel, disclosed in court filings that the firm neither represents nor holds any interest adverse to Debtor.

The firm can be reached through:

Susheel Kirpalani, Esq.
Quinn Emanuel Urquhart & Sullivan, LLP
51 Madison Avenue, 22nd Floor
New York, NY 10010
Telephone: (212) 849-7000
Facsimile: (212) 849-7100
Email: susheelkirpalani@quinnemanuel.com

Seeks to Hire Lazard Freres as Investment Banker

Chinos Holdings, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Lazard Freres & Co. LLC as investment banker effective May 4.

The firm will provide the following investment banking services in connection with Debtors’ Chapter 11 cases:

(a) review and analyze Debtors’ businesses, operations and financial projections;

(b) evaluate Debtors’ potential debt capacity in light of their projected cash flows;

(c) assist in determining an appropriate capital structure for Debtors;

(d) assist in determining a range of values for Debtors on a going concern basis;

(e) evaluate the financial terms of any proposed transaction;

(f) advise Debtors on tactics and strategies for potentially negotiating with their stakeholders and counterparties to the transaction;

(g) render financial advice to Debtors and participate in meetings or negotiations with their stakeholders and other parties in connection with the transaction;

(h) advise Debtors on the timing, nature and terms of new securities, other consideration or inducements to be offered pursuant to the transaction;

(i) evaluate any potential financing by Debtors, contact potential sources of capital as Debtors may designate and assist in implementing such financing;

(j) assist Debtors in negotiating documentation within Lazard’s area of expertise that is required in connection with the transaction; and

(k) attend meetings of Debtors’ board of directors.

Lazard will be compensated as follows:

(a) A monthly fee of $150,000 beginning in March 2020.

(b) A fee of $9 million payable upon consummation of a restructuring.

(c) A fee equal to the total gross proceeds provided for in any financing (including all amounts committed but not drawn down under credit lines or other facilities) multiplied by (i) 1 percent with respect to any senior secured debt financing or debtor-in-possession financing, (ii) 2 percent with respect to any junior secured or unsecured debt financing or (iii) 3 percent with respect to any equity or equity-linked financing. Fifty percent of any financing fee paid will be credited against any restructuring fee subsequently payable.

(d) The aggregate amount of all fees shall not exceed $12.5 million.

During the 90-day period prior to the petition date, Lazard was paid in the ordinary course certain fees and was reimbursed for work-related expenses. Specifically, Lazard was paid (i) $450,000 on account of monthly fees for March to May 2020; (ii) $4 million on account of the fee earned by Lazard in connection with the debtor-in-possession financing obtained by Debtors, and (iii) $54,619.71 on account of expense reimbursements, including a $10,000 retainer. Additionally, Lazard was paid $1.3 million on account of monthly fees under its prior engagement agreement for the period of April 2019 to February 2020.

Tyler Cowan, managing director of Lazard, disclosed in court filings that the firm is a “disinterested person” within the meaning of Section 101(14) of the Bankruptcy Code.

The firm can be reached through:

Tyler W. Cowan
Lazard Freres & Co. LLC
30 Rockefeller Plaza
New York, NY 10020
Telephone: (212) 632-6000

Taps AlixPartners as Financial Advisor

Chinos Holdings, Inc. and its affiliates received approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ AlixPartners, LLP as their financial advisor effective May 4.

The firm will provide these services in connection with Debtors’ Chapter 11 cases:

(a) assist in evaluating and challenging Debtors’ short-term cash-flow projections, including underlying assumptions, and in identifying liquidity enhancing opportunities;

(b) assist in assessing Debtors’ weekly liquidity and cash flow models;

(c) participate in contingency planning;

(d) assist in developing revised business plan and other related forecasts required by bank lenders or by Debtors for other corporate purposes;

(e) provide administrative support to the formulation of Debtors’ Chapter 11 plan of reorganization;

(f) prepare key components of Debtors’ bankruptcy plan and disclosure statement, liquidation analysis, statements of financial affairs and schedules of assets and liabilities, potential preferences analysis, claims analyses, monthly operating reports and other regular reporting required by the bankruptcy court;

(g) assist in the implementation of bankruptcy court orders;

(h) manage the claims and claims reconciliation processes;

(i) assist Debtors with electronic data collection;

(j) assist Debtors in negotiating or communicating with stakeholders, banks, creditors and other parties; and

(k) manage Debtors’ payments to their vendors.

The firm’s hourly rates are as follows:

Managing Director $1,000 – $1,195
Director $800 – $950
Senior Vice President $645 – $735
Vice President $470 – $630
Consultant $175 – $465
Paraprofessional $295 – $315

AlixPartners received an advance payment of $400,000 from Debtors. During the 90-day period prior to their bankruptcy filing, Debtors paid the firm a total of $5.15 million for professional fees and expenses incurred.

Eric Koza, managing director of AlixPartners, disclosed in court filings that the firm is a “disinterested person” within the meaning of Section 101(14) of the Bankruptcy Code.

The firm can be reached through:

Eric Koza
AlixPartners, LLP
909 Third Avenue, Floor 30
New York, NY 10022
Telephone: (212) 490-2500
Facsimile: (212) 490-1344
Email: ekoza@alixpartners.com

J. Crew Gets Approval to Hire Goldin Associates

J. Crew Operating Corp., an affiliate of Chinos Holdings, Inc., received approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Goldin Associates, LLC.

Goldin Associates will provide financial advisory services to the review committee formed by J. Crew to investigate claims or causes of action related to the transactions that it approved and executed on Dec. 2, 2016 and June 12, 2017.

The firm will be paid at hourly rates as follows:

Senior Managing Directors/Senior Advisors $1,100 – $1,250
Managing Directors $850 – $1,100
Senior Directors/Senior Consultants $700 – $850
Directors $600 – $700
Vice Presidents/Consultants $500 – $600
Analysts/Associates $300 – $500

Robert Kost, managing director at Goldin Associates, disclosed in court filings that the firm is a “disinterested person” within the meaning of Section 101(14) of the Bankruptcy Code.

The firm can be reached through:

Robert S. Kost
Goldin Associates LLC
350 Fifth Avenue
New York, NY 10118
Telephone: (212) 593-2255
Facsimile: (212) 888-2841
Email: RKost@goldinassociates.com

CHINOS HOLDINGS: Hires Hilco as Real Estate Consultant

Chinos Holdings, Inc. and its affiliates received approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Hilco Real Estate, LLC as their real estate consultant effective May 4.

The firm will provide these real estate advisory services with respect to Debtors’ leases:

(a) consult with Debtors to ascertain their goals, objectives and financial parameters, including in connection with any bankruptcy sale process;

(b) assist Debtors in developing and implementing a strategic plan for restructuring the leases;

(c) negotiate the terms of restructuring agreements, rent deferral agreements, and term shortening or termination agreements with Debtors’ landlords under the leases;

(d) provide written reports periodically to Debtors regarding the status of such negotiations; and

(e) assist Debtors in closing the pertinent lease restructuring, rent deferral term shortening or termination agreements.

Hilco will be compensated as follows:

(a) Initial Fee. Debtors will pay Hilco an initial fee of $200,000.

(b) Rent Deferred Lease Fee. For each lease that becomes a “rent deferred lease,” Hilco shall earn a fee equal to (i) 2 percent of any rent that is deferred for a period of less than one year from when it becomes due, owing and payable in connection with an applicable rent deferred lease, and (ii) 3 percent of any rent, which is deferred for one year or more from when it becomes due, owing and payable in connection with an applicable rent deferred lease.

(c) Restructured Lease Savings Fee. For each lease that becomes a restructured lease, Hilco shall earn an amount equal to a base fee of $1,500, plus the “restructured lease savings” multiplied by (a) 4.5 percent for the first $75 million of aggregate restructured lease savings, and (b) 3.5 percent for any restructured lease savings over and above $75 million.

(d) Term Shortening Fee. For each lease that becomes a “term shortened lease,” Hilco shall earn an amount equal to three-quarters of one month of 2020 estimated gross rent for such term shortened lease.

(e) Hilco will receive reimbursement of up to $25,000 for work-related expenses.

Sarah Baker, managing member of Hilco, disclosed in court filings that the firm is a “disinterested person” within the meaning of Section 101(14) of the Bankruptcy Code.

The firm can be reached through:

Sarah Baker
Hilco Real Estate, LLC
5 Revere Dr., Suite 206
Northbrook, IL 60062
Telephone: (847) 504-2462
Email: sbaker@hilcoglobal.com

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