Mason Cap Asserts Appraisal Rights in J Crew

Item 4.
Purpose of Transaction.
The Reporting Persons acquired the shares of the Company described in Item 5 of this Statement for investment purposes.
 
On November 23, 2010, the Company accepted an offer to acquire all outstanding shares of Common Stock of the Company by a consortium of private equity groups when it entered into an Agreement and Plan of Merger (as amended, the “merger agreement”). The transaction contemplated under the merger agreement (the “transaction”) is the subject of shareholders’ litigation now pending in the Court of Chancery in the State of Delaware (In re J. Crew Group, Inc. Shareholders Litigation, C.A. No. 6043-VCS).
 
On February 11, 2011, Michael Martino, as Managing Member of Mason Capital Management, delivered a letter to the Board of Directors (the “Board”) of the Company, urging the Board to increase the price to be paid to all shareholders of the Company in the transaction under the proposed settlement of the shareholders’ litigation and advising the Board that Mason Capital Management will oppose the consummation of the transaction at the current price. A copy of the letter is attached as Exhibit C to this Schedule and is incorporated by reference into this Item 4 as if set out herein in full.
 
On February 25, 2011, the Reporting Persons caused written demands to be delivered to the Company asserting appraisal rights under Section 262 of the Delaware General Corporation Law with respect to the Common Stock deemed to be beneficially owned by the Reporting Persons. Consistent with the exercise of appraisal rights, the Reporting Persons do not intend to vote in favor of adopting the merger agreement at the special meeting of the Company’s shareholders scheduled to be held on March 1, 2011.
 
The Reporting Persons reserve the right to purchase additional shares of Common Stock, either separately or together with other persons, to sell all or some of the shares of Common Stock beneficially owned by them or to otherwise trade in the shares of Common Stock, in open market or private transactions, provided that in their judgment such transactions present an attractive (long- or short-term) opportunity for profit. The Reporting Persons also reserve the right to acquire or dispose of derivatives or other instruments related to shares of Common Stock or other securities of the Company, provided that in their judgment such transactions are advisable.

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