Could you provide a link on this?
Certificate of No Objection with Respect to the Wind-Down Debtors' Motion To Approve Settlement Pursuant to Bankruptcy Rule 9019 (Filed By J. C. Penney Direct Marketing Services LLC ).(Related document(s):1197 Generic Motion) (Attachments: # 1 Proposed Order)
Yep. On Page 7, Part 4 shows the date the case is expected to wind down: 12/31/23. That date hasn't changed for a long time.
You can look at the docket here -
Such a moron
No brother no need to apologize at all. I appreciate the response that’s all it’s been a while since I saw anything get posted to the board. Thanks again
Sorry I really have no more to add. I watch the docket, but outside of routine claim processing, nothing significant has come up.
Thank you brother I appreciate the response
Expect the bankruptcy case to continue to work through claims until at least the end of the year. But we are getting closer. No indication as to prospects of recovery.
Once again, JCP seems to be doing alright AND spitting off extra CF to their acquirers. Over $100 million paid out to Simon and Brookfield over the past two years, plus $600,000 in Board fees to certain employees. $7.6 billion in revenue and $221 million in net income for FY 2022 and those figures are worse than FY 2021.
Thanks. See you in September. Do not expect anything until after Dec 31, which is the deadline for all claims to be processed.
Thanks for the article. I have not responded to JCPTrustLaw, nor have I responded to them.
I have not - and no significant documents outside of processing of claims from the docket. The next 10-K annual report for 2022 is due out the end of this month.
Liquidating Trust. https://www.ctltrust.net/about.
I am not sure we will benefit from asset sales. It looks like that goes to the certificate holders of this Copper Trust.
There were some excluded assets that were not part of the sale to Copper.
My read on the earnout is that would only get us a max. of 1/2 percent or twelve and one-half cents per 1 share of COTRP
Anyone heard any more about JCPTrustLaw?
Thanks - I caught the date of the article March 30, 2022 - nice article, though some water has gone under the bridge since then. Hopefully the situation for unsecureds has gotten better since then.
Fantastic writeup - but I have to wonder about the March 2023 wrap up date. Sounds like this was written a while back.
Several hundred former J.C. Penney employees and retirees who counted on supplemental retirement benefits have to wait another year to find out whether they’re getting some cash from the company’s bankruptcy. But in this case, “some” means less than 1 cent on the dollar.
J.C. Penney department stores exited bankruptcy more than a year ago, and new owners say the company is doing well. The real estate trust created to repay lenders by selling Penney’s properties has done better than expected. But the unsecured creditors of the old J.C. Penney, which includes vendors and some long-term employees, are still waiting for their claims to be resolved.
“We’re lucky to get anything,” said James Knesek, 56, whose corporate job as a merchandise operation director was eliminated in 2020. He worked more than 32 years at Penney and filed a claim for the $340,642 in supplemental retirement benefits he’s losing, including some income he deferred over the years.
Knesek has been working with former colleagues to stay informed about complex bankruptcy documents.
“There’s been a huge vacuum of information,” he said. Some former employees are confused about what it means when their claim is accepted. It doesn’t mean they’re in the money, Knesek said. “The plan documents say 1% or less for unsecured claims.”
Penney’s defined pension plan, which was fully funded and taken over by Athene Holding, continues to provide monthly checks to 30,000 retirees, and the company’s employee 401(k)s were protected and not affected by the bankruptcy.
But there are a few thousand individuals who lost supplemental retirement benefits when Penney filed for bankruptcy in May 2020 after the pandemic closed its stores. Not all of them filed claims, but those who did are part of the company’s unsecured creditors.
Shirley Bard, 91, of Los Alamitos, Calif., retired in 1996 and wrote in a letter to the court that she’s “no longer able to work. I have no choice but to try to save the supplemental retirement benefit I am entitled to.”
In the letter to U.S. Bankruptcy Court Judge David Jones, Bard continued, “With all the stress, I wonder just how long J.C. Penney thinks my $397 payment will need to be paid?”
The Houston bankruptcy judge has shown some sympathy toward those claimants as he has explained the laws he’s required to enforce. Jones told Bard, who attended a hearing remotely last year, that years ago he was a lawyer who represented 166 Enron employees after they lost similar retirement benefits in the infamous bankruptcy.
“I lost 166 times,” Jones said.
Former employees who deferred their income into so-called top hat company-sponsored retirement plans and suppliers such as Columbia Sportswear and Coty beauty brand that sold Penney goods will receive the same payout of less than 1%, according to Penney’s reorganization plan.
There are 29,800 unsecured claims totaling $37.7 million that are outstanding in Penney’s bankruptcy. About 700 are from former employees and retirees who filed claims. Of the few thousand people who were eligible, only 700 filed claims. Many either declined to bother with the process or weren’t aware they needed to file an individual claim. A few had earned benefits from taking early retirement plans as recently as 2017 and 2020.
The court now says it may not resolve these claims until March 2023, and it’s not clear how much money is in the pool to pay the unsecured creditors.
Funds could be added to the unsecured-claim pool from Penney store sales, but that’s not looking likely. The Penney operating company was sold as part of the bankruptcy reorganization to mall owners Simon and Brookfield.
Related:What’s Forever 21 doing inside J.C. Penney?
Simon Property Group CEO David Simon said in November that Penney is “performing terrifically well.” He reiterated that in February on an earnings conference call when he said that “J.C. Penney’s results were impressive.” But the actual results aren’t released separately. The 650-store chain isn’t expected to meet thresholds that would force the new company to honor the retirement claims of its former employees by contributing funds to the bankruptcy’s wind-down.
Separately, the trust set up to sell real estate to pay off lenders has done very well, but that money won’t go to unsecured creditors.
Much of Penney’s real estate was put into a real estate investment trust that was transferred to a group led by H/2 Capital Partners as payment for $900 million in debt. That transfer included six distribution centers, 161 stores and a master lease to rent those properties back for about $156 million a year.
On March 16, Copper Property trust principal executive officer Neil Aaronson said on a call with investors that it had “a very good first year, and both operations and sales continue to go well.”
The worth of those properties was fiercely contested by both creditors and shareholders when the reorganization plan was being hammered out in 2020. Once the trust was formed, the stores and warehouses were originally valued at $1.9 billion for accounting purposes, giving Copper Property a 15.6% gain in its first year.
In 2021, the trust sold 13 stores and six distribution centers, generating just under $800 million in net proceeds and an overall gain of $109 million. In January, the trust sold another store for $21 million in net proceeds and a gain of $4 million.
“We feel very good about future sales,” Aaronson said.
The trust’s principal financial officer, Larry Finger, tempered expectations by saying that 90% of the $109 million in gains was from the six distribution centers and one store in San Bruno, Calif.
The six distribution centers included a 1.13 million-square-foot facility in Haslet at Alliance Airport that sold for $68 million.
The Penney store at Stonebriar Centre in Frisco was among the first to be sold a year ago, and it was purchased for $10.5 million by Brookfield. A few other Texas stores were sold later in 2021.
The Village at Fairview store was sold to Dallas-based MGHerring Group for $9.74 million. The Penney store in Flower Mound’s Robertson’s Creek was sold to Inland Real Estate for $4.43 million.
Related:JCPenney Beauty brings BIPOC-founded brands into focus
It’s hard for older retirees to comprehend why the bankruptcy estate doesn’t have the assets to keep their benefits coming.
Edward T. Howard of Scottsdale, Ariz., a retiree since 2003 who worked for the company for 38 years, said during a hearing that he didn’t understand how Penney wasn’t able to pay. He said he turned down higher-paying offers from other retailers, including Walmart, over the years because he wanted to keep his retirement benefits, which he now claims are worth $2.5 million.
“No one likes the ultimate resolution of the J.C. Penney case, least of all me,” Jones told Howard at a hearing last August. “We did the best we could with what we had. I’m not insensitive to the fact that you gave a better part of your life to an enterprise that you had faith in and they’re not here at the end to take care of you.”
Related:J.C. Penney still doesn’t have a headquarters, but it’s making do at the mall
Many large companies offer executives and higher-paid staff these supplemental retirement plans, said Brandon McCormick, a consultant with Qualified Plan Advisors. Now he’s hearing more from small and midsize companies.
“It’s a growing trend in this labor market and has to do with recruiting and retention,” McCormick said. These plans allow higher-paid people to defer more of their income to their retirement years. This year the maximum individual contribution allowed by the IRS into a 401(k) is $20,500.
The top hat plans allow deferred income to grow tax-free, but the funds are not in a separate account accessible by the employee like with a 401(k) plan.
“At the end of the day, these funds are considered property of the employer,” McCormick said.
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Maria Halkias, Staff writer. Maria H
Welp, nothing beats a good conspiracy, especially if it has legs.
WaMu I would think it’d be way more complicated. Maybe not since JCP was the golden rule and founded in 1902.
“In Penney's Golden Rule Store his respect for customers was a rare practice during an avaricious business era that required providing quality goods at affordable prices. Penney honored his employees whom he referred to as "associates” by offering them a share of the profits.”
There are a very slim minority in Wamu that did not sign releases, but we are expecting some collateral from the LIBOR litigation anyway. But our board that still tracks Wamu is so steeped in conspiracy theories that Jesus, and even his cat, have been dragged into that mess.
The earn out should be interesting. Wasn’t it profit based for 2 years? That provision allowed Simon to purchase JCP’s assets at a discount, as I understand it.
It’s also been 2 years I believe and I haven’t heard anything about that. I wonder what is the status of the profit sharing agreement involving class 7.
WaMu is a good example. Both are bankruptcy court but other options exist outside of bankruptcy courts.
The other options get risky because one would have to use their own cash and fight as an individual or a party lawsuit (not class action).
Still too many claims to put a good answer to that unless you want to think about some wildcard stuff. The bankruptcy case now has until 12/31/23 to resolve claims. Still lots of time for stuff to happen.
I don't believe there has been any structural change to JCPenney's operations. Probably some consolidation in the back office post acquisition, but largely the same company with the same marketing and the same products.
Going from bankruptcy to "unbelievably profitable" in under three years is quite the accomplishment... and so is getting debt absolved without merit.
That is a great question. They default, screw share holders, and are enjoying unbelievable profits now.
From the article linked below -
"In 2021, many of Simon’s brands were “extraordinarily profitable,” and J.C. Penney in particular is enjoying “unbelievably profitable EBITDA,” Simon also said."
How much better would everyone's cash flow be if they just screwed the debt holders out of legally obligated debt repayments? I would be "unbelievably profitable" as well.
And Washington Mutual . . . still going strong over there too.
Oh ok thanks brother got me excited for a second. Between this and my Lehman I’m tired beyond
The same recycled story comes up every few months or so.
Mr penny what makes you say this? I’m interested to know more. Thanks brother
Some stir-crazy snowbound Canadian.
They are still selling off assets and it is unknown if it will spill into class 7 (although it was stipulated it cannot be 0 or less than zero).
I haven’t looked at all into the earnout agreement. Don’t know if we get screwed with that or not since it was profit based and used as a way to “discount” the sale of JCP.
Yep. Allowed for class 8, but not yet approved.
Sounds like one of the claimants got their claim allowed. A few have over time. Tons of claims still to go through.
I find this to be interesting.
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, UPON ENTRY OF THIS STIPULATION IT IS ORDERED THAT: 1. Proof of Claim No. 5679 is allowed as a Class 8 General Unsecured Claim in the amount of $500,000. 2. If Hays is awarded any amounts in the Underlying Litigation, the first $500,000 of such award shall only be recoverable through treatment as a Class 8 General Unsecured Claim 1 A complete list of each of the Debtors in these chapter 11 cases may be obtained on the website of the Debtors’ claims and noticing agent at http://cases.primeclerk.com/JCPenney. The location of Debtor J. C. Penney Company, Inc.’s principal place of business and the Debtors’ service address in these chapter 11 cases is 6501 Legacy Drive, Plano, Texas 75024. , and 812 United States Bankruptcy Court Southern District of Texas ENTERED December 13, 2022 Nathan Ochsner, Clerk Case 20-20184 Document 823 Filed in TXSB on 12/13/22 Page 1 of 3 2 under the Plan.2 Hays’s rights against applicable insurance providers or with respect to amounts awarded over $500,000 in the Underlying Litigation, if any, are unaltered. 3. The Objection and the Response are moot. 4. This Stipulation is immediately effective upon entry. 5. The Wind-Down Debtors’ claims and noticing agent, Kroll Restructuring Administration LLC (f/k/a Prime Clerk LLC) shall updated the claims register to reflect the relief granted in this Stipulation. 6. This Court retains exclusive jurisdiction over the interpretation and enforcement of this Stipulation. Dated:________ _________________________________________ DAVID R. JONES CHIEF UNITED STATES BANKRUPTCY JUDGE
Right. Sorry I would never make it in customer service.
That’s very true. I filed a claim prior to the deadline for the full amount due, which would mean $25 face plus dividends.
While I expect that won’t happen, the return on any certificateholder cannot be zero. That is where it gets confusing along with the earnout, which I guess is or was profit based after 2 years.
That earnout agreement allowed SPG to purchase JCP at a discounted value.
Much depends on what is left of the estate after claims against it are processed, a sausage-making process that continues.
Yep and it has been determined the general value for certificateholders is not 0 nor greater at this point.
There is a however clause in addition to certificateholder value.
This made me think something was up. There isn't.
The case is not expected to conclude until Dec 31, 2023. But we knew that already.