(REUTERS) -- J. Crew Group Inc filed for bankruptcy protection on Monday with a plan to hand over control to lenders, adding to a list of brick-and-mortar retailers pushed to the brink by widespread store closures in response to the COVID-19 pandemic.
The New York-based chain, known for preppy clothing at times worn by former first lady Michelle Obama, filed for bankruptcy in a Virginia federal court with an agreement to eliminate $1.65 billion of debt in exchange for ceding ownership to lenders. Overall, roughly $2 billion of its total debt will be cancelled and exchanged for roughly 82% of equity in the retailer under the plan's terms, according to court records.
J. Crew, which employed about 13,000 people before an April furlough program, is the first high-profile retailer to seek bankruptcy protection since the coronavirus spread across the globe, prompting government officials to order businesses deemed nonessential to temporarily close.
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