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Retail Restructuring

BY Adam C. Rogoff, Erica D. Klein
November 02, 2017

Various debt-burdened retailers are looking to their intellectual property assets as a source of untapped value for refinancing transactions. While it remains to be seen which strategies will be most successful, IP assets will play a key role in future retail restructurings. As the value of brick-and-mortar “hard” assets stores becomes tapped out, a retailer's brands, licenses, and associated IP rights may present reliable sources of value.

J. Crew: A Bellwether

Companies and investors alike are keeping an eye on recent high-profile IP-driven refinancing transactions, most particularly by J. Crew, whose restructuring and corresponding IP transfers are the subject of pending litigation. See Eaton Vance Mgmt. v. Wilmington Sav. Fund, No. 654397/2017 (N.Y. Sup. Ct. complaint filed June 22, 2017). In December 2016, the clothing company assigned rights in certain of its trademarks — including its quintessential J.CREW mark — to an unrestricted subsidiary, effectively eliminating an upcoming maturity. The transferred marks were subsequently pledged by the unrestricted sub to back new notes issued as part of a restructuring transaction.

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