J Crew settles investor lawsuits for $16 million
* Agreement ends lawsuits over J Crew buyout
* Deal revives earlier settlement, with $6 mln added
WILMINGTON, Del., Sept 1 (Reuters) - Investors agreed to a $16 million settlement of lawsuits stemming from the buyout of clothing retailer J Crew Group Inc by two private equity groups, according to an investor attorney.
The settlement is based on an earlier $10 million agreement that collapsed in January, according to Stuart Grant of Grant & Eisenhofer PA, which represents shareholders.
The earlier agreement collapsed after each side accused the other of failing to keep up its end of the bargain.
The shareholder lawsuits stem from the $3 billion deal by TPG Capital LP and Leonard Green & Partners LP to buy the company, which has more than 300 stores and a catalog operation.
TPG and J Crew declined to comment. Leonard Green did not return calls for comment.
Several shareholders brought putative class action lawsuits claiming that J Crew's board was short-changing shareholders and accusing them of running a flawed sale process that favored the private equity buyers.
Millard Drexler, the company's chief executive, was also accused of using the deal to entrench and enrich himself at the expense of shareholders.
The deal closed in March after shareholders gave their approval, although about a third of them voted no or abstained.
In January, the two sides agreed to settle the litigation for $10 million, which included an agreement to shop the company to other potential buyers for 30 days.
Weeks later, shareholders accused the company of breaching that agreement by turning the "go-shop" period into a "charade" that favored the chosen buyers.
The company in turn sued the shareholders to enforce the settlement.
Now, the shareholders and defendants have agreed to revive the original agreement, with $6 million added to compensate for the half-hearted effort to sell the company, said Grant.
The agreement must be approved by Delaware's Chancery Court.
The case is In Re J Crew Group Inc Shareholder Litigation, Delaware Chancery Court, No 6043 (Reporting by Tom Hals. Editing by Robert MacMillan)