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I wish I had an update or something insightful to say. But we are at the mercy of the court at this point.
If the financials and statements made by Simon and it's leadership are considered in court, we should get something... Unfortunately, what "should" happen has rarely, if ever, happened since JCPenney declared bankruptcy.
I don't know about y'all, but I hope the 12/31/2023 deadline is the final deadline.
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.
https://www.retaildive.com/news/jc-penney-profits-tumbled-last-year-as-sales-edged-down/649303/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202023-05-04%20Retail%20Dive%20Newsletter%20%5Bissue:50220%5D&utm_term=Retail%20Dive
Thanks for the article. I have not responded to JCPTrustLaw, nor have I responded to them.
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.
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."
https://www.retaildive.com/news/simon-property-group-sells-off-eddie-bauer-interest/642161/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202023-02-07%20Retail%20Dive%20Newsletter%20%5Bissue:47875%5D&utm_term=Retail%20Dive
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.
106,000 shares traded now.
Another settlement from a Retailer from 5 years ago - https://www.retaildive.com/news/toys-r-us-creditors-reach-resolution-former-execs-lawsuit-bankruptcy/634240/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202022-10-17%20Retail%20Dive%20Newsletter%20%5Bissue:45315%5D&utm_term=Retail%20Dive
There are similarities to our case in my opinion.
If the post bankruptcy JCP had to pay legal debt obligations rather than getting those dismissed in bankruptcy court, then they wouldn’t be talking about the great performance post bankruptcy.
All that stimulus that hit checking accounts of Main Street in 2020 was a lost opportunity to stay in operation (rather than entering bankruptcy). JCP also claimed sufficient liquidity right before the govt shut down the economy as well. You would imagine there would be a force majeure clause within those debt obligations that could have been claimed. But Soltau wanted the easy way out with that million dollar retention bonus.
I was in Wamu way back when. I got out when all that buffoonery took place with the bailouts and new rules were put in place (or made up). There were very few that benefitted at the expense of shareholders and debt holders, but benefitted they did.
JCP hired a new CFO... Comments made about JCPenney's performance indicate that Simon got a great deal. For those that don't know, JCPenney's biggest event of the year (outside of Holidays) was their back to school promotions. Here's the article - https://www.retaildive.com/news/jc-penney-hires-chief-financial-officer-stephanie-plaines-jones-lang-lasalle/629589/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202022-08-12%20Retail%20Dive%20Newsletter%20%5Bissue:43807%5D&utm_term=Retail%20Dive
Sometimes it takes a while - https://www.retaildive.com/news/sears-holdings-175m-settlement-eddie-lampert/629425/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202022-08-11%20Retail%20Dive%20Newsletter%20%5Bissue:43775%5D&utm_term=Retail%20Dive
Obviously different situations. I think JCP was a bigger screw job than Sears was.
I have not. I declined to join their cause. If they are successful, we would have some kind of precedent for recovery from US Bank. I think anyway.
Happy 4th everyone!
Was anyone else contacted other than me and MrPennyStocks?
I got the same message. Before I go forward, I want names and business identification before I agree to get on board.
Yes, there is no way out for the President. He and his party again want to ignore recent history of disparaging the fossil fuel industry and wanting to "phase out" oil. The hearings are included as part of the Congressional record, not exactly hard to find (or forget that it recently happened either).
I forgot to mention that Iran lobbed a missile into Iraq for some reason. Not too bright on their part, but with the desperation from Europe and North America, I assume all foreign aggression will be tolerated as long as the current administration can get their oil.
With all that being said, let's get Tau2 spud!
I don't think there is a chance oil will average less than $100/barrel for 2Q and 3Q. I would guess the 4Q would be no less than $90/barrel, but even then, where is the new production coming from? Venezuela, Iran and Russia will all be absorbed relatively easily, if any new production comes from those Countries, specifically Venezuela, no way they produce more than what they currently have within the next 9 months. In Russia's case, if they decide to end the war, will the West forget about the invasion and related war crimes committed in Ukraine?
Why will Twitter light up soon?
I bought more shares last week, GSPE is a known prospect and could be a shorter term project with oil prices to be elevated throughout most of the year. Seems like an oil major, drowning in FCF, may be tempted with Delek to partner for the Tau2 well.
Simon Property Group share prices have more than doubled since April 2020. They reported US Occupancy at malls and premium outlets (their core business) was 93.4% as of 12/31/2021. Their earnings report, released February 7th, indicated that 4th quarter revenue was $1.33 billion, 17.7% YoY and beat analyst estimates by $70 million.
Simon will pay a $1.65/share dividend on March 31st, which equates to a $542,190,000 payout. Payout ratio is 104.54%.
JCPenney declaring bankruptcy when every lender and govt entity was throwing around loan deferrals and stimulus funds will remain one of the more disgraceful decisions in recent memory.
All questions are good questions MB, I just don't know and have a hard time finding the assets still remaining. When I was looking at this back in late 2020 and early 2021, I saw enough assets remaining to make class 6 whole and a partial recovery for class 7. So really, I just stopped looking and decided to hold on to the shares I have.
We still have lawyers representing class 7 and bankruptcy is still open, to me, that's a good enough sign for a recovery. If that happens or not is another issue. JCP is one of the few companies that threw in the towel during 2020 rather than trying to survive with the govt stimulus being thrown around. Real disservice to the common shareholders and pensioners.
I think we just need to keep an eye on docs coming out of court, probably best not to review all the docs already made public. There's simply too many of them.
I wouldn't say appraisals are bogus, but I will say they trail the market when the RE prices appreciate or depreciate rapidly. We saw this during the financial recession of 2008-2009 and we see it recently with the massive stimulus being issued by the Federal govt to combat the response to COVID (i.e. shutdowns and restrictions were the economic problem, not COVID the virus).
I think it's because most appraisers use comps, or comparables, from the previous 90 days and even during that time, you will see appreciation/depreciation of 5% to 10% that is unaccounted for within the appraisal.
I believe the secured debt holders made the claim that on average, JCP RE assets were worth only $600k on average, which I have always found hysterical. My 4 bedroom house is worth more than that. It's on 1/3 acre in a suburb in Texas.
The 11/20/2020 sale, was that the parking garage in Alaska by chance? Or was that the property in the Dallas/Forth Worth area?
For the 6/30/2021 report, is there a form title? If memory serves, I believe Class 6 claimed to be impaired. So if the anticipated recovery for class 6 is now 100%, then we (class 7) should be under the assumption that the bankruptcy court underestimated the valuation of the assets. I believe all real estate assets will need to be sold at appraised value (if restructured company acquires the RE) or on the open market to the highest bidder, no exceptions. It would be rare for an "impaired" asset class to be adjusted to exactly 100% payout with the next class receiving nothing.
Just thinking about it in this manner, we know that RE has appreciated greatly since April 2020 or when the valuation of the RE came in. Both open market sales and appraisals should surprise to the upside, in most cases.
Yes, I believe those two dates coincided with one another. You'll have to forgive my timeline of events, this bankruptcy has lasted a while.
Yes, I believe sometime in September/October 2021, there was a court document that declared these ticker symbols (or CUSIPs) would cease trading and make shareholders of record during a certain date. Meaning any trades thereafter are meaningless.
If someone has a different interpretation please feel free to jump in.
Why it still trades, I am not sure. But there was a noticeable lack of trading after whatever date decided within the court.
MB, at this point, whatever you find publicly will be hard to rely on and probably too old as well.
If you find something though, I don't mind taking another look at it. Basically, the class 7 claim for COTRP is full book value of the total claims, or $25/share. The discussion back in mid 2020 was market value vs book value. And COTRP would have gone by book value for the total claim amount. As a result, distribution would have been made pari passu with the rest of the class 7 claims.
Previous classes will be made full prior to any distribution to class 7; however, I am still of the belief that class 6 was made in full regardless of the claims that they were not. I based this on 2020 COVID shut down activity, not reopen, booming retail, historic consumer liquidity and real estate appreciation totals. If anything, COTRP should be more valuable today than this time last year.
I would recommend not buying since COTRP because it makes no sense to. I believe holders of COTRP was made of record last September or October. Meaning any trades after that date is irrelevant.
No. All assets have appreciated since April 2020, acquirer and legacy business have all done extraordinarily well. I don't have the numbers, but the wind down assets should have increased in value.
If I can get some updated numbers from bankruptcy court, I will do another calculation, but I haven't seen anything to go on since very early in the bankruptcy period.
The entire reason the unsecureds did not get a payout was because the secured lenders claimed they were taking a haircut on the debt they were owed, which is (and was at the time) nonsense.
That's the last person to listen to. My initial estimate was high $2s, but I am certain that has changed for a variety of reasons, between Simon Group's success, JCPs post bankruptcy success (due in large part because there was no debt to pay) and dramatic increase in real estate prices that are included with the wind down assets.
Great DD Mrs. Smith. Thank you for your posts and research.
Hopefully this is Gulfslope!
I think what we need to know is what exactly is included with the wind down assets and what the status is of the sales of the non-acquired property. From there, we can take a look at the Class 7 claims and come up with a recovery value.
I would prefer just settling with Simon Group. In hindsight, and at the time for some people, the deal made to acquire JCP was far too generous with secured debt holders and to the detriment of everyone else, including the common shareholders and the JCP retirees.
That is correct. We did confirm that back in late 2020.
Hey MB, I can double check the numbers. Wasn't there another factor at play here? I believe distribution centers were for sale that would be included in the wind down. It's been so long since I've looked at it.
If you compare 2021 to 2020 with real estate prices, distribution centers, retail numbers, consumer liquidity, etc. JCP should have never declared bankruptcy and the secured lien holders making the claim that they were or are not being made whole is a complete joke.
This is spot on. I am glad someone is writing/reporting about all of that.
The attitude of the administration has gone from lackadaisical to incompetence to cruel. Not even mentioned is that the administration asked OPEC for more oil production, which is ironic, at best... sinister at worst.
I agree. I’m just going to hold. Not transfer or liquidate. I thought it was an odd message to send because it wasn’t very clear on what action needed to be taken. Liquidate or transfer are not the only options. Holding should be permissible. Even with no market trade value.
Did anyone else get a message regarding COTRP from TDAmeritrade?
This is up 83% since I mentioned on the board... I'll pat myself on the back lol
Free for who? It's $70,000 to put solar panels on my roof. The gigantic wind farms out in West Texas certainly was not "free" by any stretch of the imagination. Wind energy is also more expensive for the end user with the difference normally being around $.04/Kwh.
And then there is the rare earth metal mining that helps out your buddies over in China.
So by "free and clean" you actually mean far more expensive, with more "dirty" mining for the benefit of China... Biden also stopped the copper mine in Arizona, even though that would help American workers and domestic production/GDP. It's almost like Biden prefers to work with the Chinese... Joe Biden, not Hunter, if you needed me to clarify.
I think it's the overall strength of the sector. Also Delek's news/plans were interesting. It could benefit GSPE.
It's looking like people are beginning to recognize the underinvestment in the energy sector, and those effects were exacerbated by COVID shut downs. I would imagine O&G firms will consider increasing their CAPEX soon, even with a hostile regime toward O&G in DC.
What is the point of converting into a cryptocurrency?
Are you familiar with George Kubin of BOKF? Looks like he's representing the unsecured creditors.
Thanks for posting this link!
Thanks MktMvn, I do not have an O&G background, so it sounds like the logs will be indiscernible for me. I still think it is a positive that other O&G companies can see this information though, it may help in GSPEs case. And Delek's case really, if they are in search of another partner.