Abercrombie & Fitch amends loans in response to stockholder lawsuit

By Angela McDaniels

Tacoma, Wash., Sept. 10 – Abercrombie & Fitch Co. said the lenders of subsidiary Abercrombie & Fitch Management Co.’s asset-based revolving credit facility and term loan waived any default or event of default arising as a result of the civil action filed by Eric Gilbert, a stockholder, against Abercrombie & Fitch, the company’s directors and administrative agent Wells Fargo Bank, NA in the Common Pleas Court of Franklin County, Ohio, Civil Division, on Aug. 22.

According to an 8-K filing with the Securities and Exchange Commission, the plaintiff alleges, among other things, that the directors of the company violated their fiduciary duties to the stockholders by agreeing to an alleged “dead hand” proxy put provision in the definition of “change of control” in the credit agreements.

The ABL revolver was amended to remove the alleged dead hand proxy put provision whereby certain changes in the composition of Abercrombie & Fitch’s board of directors would have constituted a change of control and thereby an event of default.

The term loan was amended to modify the definition of “change of control” so that the definition no longer treats changes in the composition of the board of directors differently in the context of actual or threatened proxy solicitations.

In addition, the amendment modified the provisions of the ABL revolver and term loan credit agreements addressing when a contest of the validity or enforceability of any provision would constitute an event of default under the respective credit agreement to require that such contest be made by a loan party in order to constitute an event of default.

Abercrombie & Fitch is a New Albany, Ohio-based retailer of casual apparel for men, women and kids.

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