Heavily indebted retailers J. Crew Group Inc. and Claire'sStores Inc. are delving into their loan agreements to findcreative ways to raise or reconfigure their debt. Andcreditors, who often have the most to lose, may not be able tostop them.

Take the case of preppy clothing maker J. Crew. The NewYork-based company is said to be seeking to take advantage of aclause in its loan agreement allowing it to shift its brand name,the crown jewel of its intellectual property, to an unrestrictedentity in the Cayman Islands. By doing this, it may now be possiblefor J. Crew to borrow against the assets and use the proceeds tobuy back a portion of its roughly $2 billion in debt at adiscount.

“There may be other situations, but we haven't seen retailcompanies using IP assets and investment baskets like this before,”said Steven Ruggiero, head of research at R.W. Pressprich & Co.“They are taking advantage of valuable assets that haven't beenoptimally utilized to find new creative ways to create liquidity toextend their existence.”