J. Jill’s deal with lenders follows months of background talks that started with a breach of its current loan, a forbearance agreement, and multiple deadline extensions. Just two weeks ago, the company signaled that a bankruptcy was possible if it didn’t win the consent necessary from its lender base.
Sparking all of it was the company’s initial disclosure of deep financial distress, in the form of a “going concern” warning — language in its regulatory filings that it might not be able to survive over the next 12 months. Its going concern warning represented a violation of its loan terms, prompting the forbearance agreement with lenders.
