Sycamore also referred to parts of the agreement between the two parties in the complaint and stated that Victoria`s Secret` parent company, L Brands, had agreed that it “does not change company guidelines, practices, principles or methods.” In addition to Nash`s stint as Chairman of the Board, further steps will continue under the Sycamore Agreement: on May 14, the founder, CEO and Chairman of L Brand`s Board of Directors, will resign at the company`s (now virtual) general meeting, Andrew Meslow, CEO and Chairman of the Board of Directors of Bath-Body Works, will be CEO of L Brands and will join the Board of Directors. and three directors resign. The appointment of L Brands CFO Stuart Burgdoerfer as Managing Director of Victoria`s Secret is new and now effective, according to the L Brands statement. Sycamore signed the agreement on February 20, a day after stock indexes hit record highs. Within days, investors woke up to the devastating potential of the coronavirus epidemic. Corporate lawyers stated that references to pandemics crept into merger agreements and other contracts at the time of the L Brands-Sycamore agreement. Until then, it was not hard to imagine that the new coronavirus, which appeared in China at the end of last year, could cause economic upheaval. The city of Wuhan had already been closed, and the first case of Covid-19 had been diagnosed in the United States. The virus has spread widely around the world, with cases already reported in South Korea, the Philippines, Japan and Italy. But with his agreement to buy Victoria`s Secret, Sycamore`s happiness could be exhausted – and now he`s using some long-awaited legal arguments to get out of the deal.
On April 13, Mr. Morrow raised the notion of “adjustment” of the purchase price “to take into account the situation of Covid-19.” After L Brands refused to discuss it, Sycamore said it denounced the agreement and filed a complaint in Delaware, claiming that L Brands had violated the terms of the agreement. L Brands responded and insisted that the agreement be implemented.