The J. Crew trapdoor refers to a specific loophole in credit agreements that allows a company to transfer assets from creditors to unrestricted subsidiaries through a two-step process. This involves using a provision within investment covenants that permits non-guarantor restricted subsidiaries to make investments funded by proceeds from those subsidiaries. The original process allows the company to effectively move assets out of the credit group into an unrestricted subsidiary. Although this loophole has been largely removed from credit agreements after J. Crew's experience, the absence of the J. Crew trapdoor does not guarantee that companies cannot still transfer assets. Many credit agreements contain various other baskets—like leverage-based, builder, or general investment baskets—that can be utilized for transferring assets, even without the specific J. Crew clause. Therefore, the lack of a J. Crew trapdoor can be misleading, as companies may find other avenues within their agreements to execute similar asset transfers, which highlights the importance of understanding the broader structure of these investment baskets.