LIST THE ASSETS THAT ARE CAPTURED AS CO-LATERAL AGAINST THE FIRST AND SECOND LIEN NOTES
• The First and second Lien loan is secured against the following asset: o Equipment
o Real estate
o Intellectual property
o Intercompany – Ineptness.
• Original loan = $0.5B (1st Lien) + $0.4 (2nd Lien) (Docket 25, page 39)
• Loan to value (Assuming 70% LTV as this information was not readily available).
o Thus, the underlying secured assets = $0.9 B / 0.7 = $1.29 B *
• Current outstanding loan amount = $ 0.9 B (Docket 25, page 36)
• Net value of the secured assets after the loan = $0.390 B which needs to be accounted
against shareholder equity. Request to the judge and the equity committee to validate these assets and account for it against the shareholders equity.
ITEMIZED LIST OF UNENCUMBERED REAL ESTATE AND ITS VALUATION
• Value of the unencumbered real estate and other assets, per independent analyst (Barrons.com this week) is valued roughly at $1.40B.
• This asset is owned solely by the current equity owners and is free of lien.
• Debtor acknowledges the importance of this asset Docket 25, page 10 and is part of the
central strategy to transfer assets from the current equity holders from the current JC
Penney entity into the newly formed Retail entity and REIT.
• Request to the judge and the equity committee to validate these assets and account for it
against the shareholders equity.
Total Net Residual shareholders assets (After netting out the loan amount) against these assets are as follows:
• ABL Credit facility = $1.761B
• 2016 Term loan secured assets = $0.909 B *
• First and second Lien loan secured assets = $0.390 B *
• unencumbered real-estate assets = $1.40B *
Total residual shareholders assets = $4.46B
Total unsecured obligation = $1.318B (Docket 25, page 38)
Value of NOLs @ 30% tax rate on $2.2B = $0.66B
Thus net residual shareholder equity in the current JC Penney holding = $3.802B
i.e. $11.85 / share. *
* Note that the asset valuations are from 2016 and should have at-least 10 ~ 15% additional valuations than what’s on the books (if not more
