Illustration: Rebecca Zisser/Axios

Sycamore Partners on Wednesday backed out of its agreement to pay $525 million for a majority stake in women's lingerie retailer Victoria's Secret, claiming current owner L Brands (NYSE: LB) breached deal terms by closing stores, furloughing store staff, cutting senior executive pay, and defaulting on lease agreements.

Why it matters: This sets up a legal battle between standard M&A terms that have come into conflict due to the coronavirus pandemic and government lockdowns, and might set some precedent.

Details: The merger agreement includes a clause requiring L Brands to run VS in an ordinary manner prior to completion. But it also explicitly exempts "pandemics" and "police actions" from constituting material adverse effects.

  • Irony: Sycamore claims in court filings that VS' decision to stop paying rent on closed stores is among the actions that hurt the business' fundamental value. This is the same Sycamore that owns Staples, which still refuses to pay rent on stores that remain open.
  • It also makes a big point of L Brands not asking Sycamore for permission to close most of its 1,600 stores, although it's unclear if L Brands never asked or if it did and Sycamore denied the request. Either way, it seems irrelevant given that VS stores wouldn't be considered "essential businesses" in most locked-down states.

L Brands says it plans to pursue all legal remedies, including asking a judge to force deal completion via a court order of "specific performance." Yup, some serious shades of 2009 here.

Bigger picture: No one yet knows how physical apparel retailers will return to "normal." Even if consumers return to indoor shopping malls, it may take longer before they're willing to try on clothes that someone else might have tried on before them.

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Updated 6 mins ago - Politics & Policy

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Illustration: Annelise Capossela/Axios

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Twitter jumps into the fray for TikTok

Illustration: Sarah Grillo/Axios

Twitter is the latest to join the cast of the ongoing spectacle that is TikTok’s battle to stay open for business in the U.S., per a new report from the Wall Street Journal.

Why it matters: The saga to keep TikTok available to U.S. users is getting more complicated, with the company already in a President Trump-imposed time crunch and juggling a number of options.

Downtown Chicago hit by widespread looting

Police officers inspect a damaged Best Buy in Chicago that was looted and vandalized. Photo: Scott Olson/Getty Images

Chicago police responded to hundreds of people looting stores and causing widespread property damage in the city's downtown overnight, resulting in at least one exchange of gunfire, the Chicago Tribune reports.

The state of play: Police superintendent David Brown said the event was a coordinated response after an officer shot a suspect on Sunday evening, per CBS Chicago.