J. Crew Acquisition Litigation

After J. Crew Group, Inc. agreed to be acquired by a private equity group including TPG Capital, Leonard Green and the company’s CEO Mickey Drexler, shareholders filed suit claiming that the acquisition price was too low, the process the Board of Director’s pursued was improper, the deal provisions were unfair, and the disclosures made by the company were misleading and inadequate. Compass Lexecon expert, Professor Daniel R. Fischel was retained on behalf of defendants to analyze the economic evidence with regard to the plaintiffs’ claims. J. Crew subsequently entered into an agreement to settle the lawsuit challenging the pending $3 billion acquisition. The favorable settlement included a series of relatively minor concessions by J. Crew, such as agreeing to pay the class of shareholder plaintiffs $10 million upon consummation of the transaction, extending its “go-shop” period, reducing its termination fee in certain circumstances, eliminating certain matching rights provisions, and providing that a majority of unaffiliated shareholders must approve the merger which was overwhelmingly approved. Professor Fischel was assisted by David Ross, Laurel Van Allen, George Hickey and others in Compass Lexecon’s Chicago office. We worked with Meredith Kotler of Cleary Gottlieb Steen & Hamilton LLP and Wes Earnhardt of Cravath, Swaine & Moore LLP.