J. Crew receives lawsuit from two lenders

Just a week ago, J. Crew's restructuring debt program was released. The sophisticated fashion label was making progress towards improving its debt after receiving approval for a credit agreement. Only a couple days later, two lenders had filed a lawsuit against the pepper retailer in order to try and block the new financial plan.

The lenders, Eaton Vance Management and Highland Capital Management LP, filed a lawsuit in New York State Supreme Court. As reported by the Sourcing Journal, the two are attempting to block a restructuring transaction because it would result in moving the retailer's intellectual property beyond their reach. “Accordingly, plaintiffs and other term lenders are entitled to have all of the value transfers,” the court papers stated, according to the publication.

The exchange offer that J. Crew announced on Monday total 566.50 million dollars. The brand faces a debt total of 2.1 billion dollars, FashionUnited reported earlier. With the exchange offer, J. Crew has the time and the means to now reach a turning point and boost its sales. If this lawsuit doesn't halt the agreement, J. Crew could be on its way to a debt-free future.