"Sycamore ... may regret that they did not negotiate the allocation of pandemic risk differently," L Brand’s lawyers said. "But having made that commercial choice, Sycamore must now live by it."
You're not going anywhere
Sycamore Partners agreed to buy a 55% stake in the Victoria's Secret lingerie brand for $525 million in a February deal that valued the business at $1.1 billion. Less than a month later, the coronavirus outbreak was declared a global pandemic and L Brands closed down the retailer's 1,100 stores, furloughed its 88,000 employees, and skipped paying its April rent in a bid to conserve cash.
Sycamore contends those actions violated the terms of the purchase agreement and it sued L Brands in a Delaware court in an effort to back out of the deal. L Brands responded the arguments were "nonsense."
In its filing, L Brands contends it was upfront with Sycamore Partners about its intentions during the crisis and "as recently as a week ago (Sycamore) intended to proceed with the transaction." It said the firm even admitted it was taking similar actions with its own retail properties in its portfolio.
L Brands wants the court to enforce the terms of the transaction that gives Sycamore a controlling stake in both Victoria's Secret and its sister Pink brand.