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The first large retail casualty of the coronavirus pandemic is here, with lawyers at Weil, Gotshal & Manges leading the way for what promises to be a long, painful stretch for the clothing industry in bankruptcy court.

J. Crew, the preppy mall mainstay that has been struggling for years with declining sales, but whose coronavirus-related store closures pushed it over the edge, filed Chapter 11 paperwork Monday in the Eastern District of Virginia. The company said it owed between $1 billion and $10 billion to as many as 50,000 creditors.

A Weil team led by Ray Schrock, Ryan Dahl and Candace Arthur is debtor's counsel. Hunton Andrews Kurth, led by Jason Harbour and Tyler Brown, is local counsel. Milbank is counsel to members of an ad hoc lenders' committee including Anchorage Capital Group.

Weil is no stranger to high-profile retail restructurings, including for Sears, Macy's, Kmart and accessories retailer Claire's. J. Crew has been a longtime client, and Weil helped the company restructure its debts in 2017.

The firm has also been working with J.C. Penney, another embattled retailer that is expected to file for Chapter 11 protection in the coming days.

Hunton Andrews Kurth has debtor-side experience from multiple energy and financial sector bankruptcies in addition to convenience-store chain Uni-Marts and textile manufacturer Harriet & Henderson Yarns.

Retail bankruptcies are only expected to increase as the coronavirus pandemic has largely shuttered the economy and plunged millions of Americans into unemployment, creating a tipping point for already struggling companies. Big Law restructuring groups, which have been fortifying themselves in the last few years in anticipation of an economic downturn, stand to gain millions of dollars in fees for work brought on by failing businesses in an unstable economy.

In J. Crew's case, the retailer has faced years of declining revenue as the brand charged above-market prices for lower-in-demand designs. It hired a new chief executive in January, but help didn't come soon enough: the company closed its physical stores in Mid-March as many states issued shelter-in-place orders and has since been in dire straights.

J. Crew said in a statement it reached an agreement that its lenders will convert about $1.65 billion of the retailer's debt into equity. It has also secured  $400 million debtor-in-possession financing and committed exit financing from Anchorage Capital Group, GSO Capital Partners, Davidson Kempner Capital Management and others. Lazard is serving as an investment banker and AlixPartners LLP is serving as restructuring adviser to J. Crew, while PJT Partners is investment banker for Anchorage and an ad hoc committee.

Additionally, J. Crew has canceled its planned initial public offering of Madewell, although it will remain a part of the company.

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