L Brands, the firm that owns the iconic lingerie brand Victoria’s Secret, reported on Wednesday that the investment fund Sycamore Partners, with which it signed an agreement in February to transfer the majority of the company, wants to cancel the transaction.
The fund, which disbursed $ 525 million for 55% of the capital of L Brands, considers that the decisions taken by the firm to survive the coronavirus pandemic violate the signed agreement and asked the US justice to invalidate the operation.
Sycamore, who wanted to create an independent company with Victoria’s Secret and the PINK brand, filed the case in a Delaware state court. This announcement lowered LBrands’ shares on the New York Stock Exchange by 16%. Even the exchanges of these papers were temporarily suspended by the fall.
“L Brands will defend itself vigorously against this lawsuit and will do everything in its power to ensure that its contractual rights are respected,” said the lingerie maker, stressing that it is continuing with the work to complete the operation.
The Sycamore fund blames L Brans for closing practically all Victoria’s Secret and PINK stores in the world just one month after the agreement. This, among other measures, was taken by L Brands in the context of the coronavirus pandemic, which paralyzed economic activity in Europe and the United States. The agreement, signed on February 20, put L Brands worth $ 1.1 billion.
The United States, with 45,000 deaths, is the country where the virus has claimed the most lives, but also, 22 million people have lost their jobs in this crisis.
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