JCPNQ-MULTI-BILLION DOLLAR QUESTION-IS EQUITY INCLUDED In THIS WEEKEND DEAL
IF EQUITY NOT INCLUDED, DOES JUDGE SIGN EMERGENCY EC MOTION (Rule 60) TO DISMISS DIP WHICH WOULD KILL THIS DEAL TO DO A PROPER RESTRUCTURING SO ALL PARTICIPANTS CAN SEE A SUBSTANTIAL RETURN?
BY Knight Ridder/Tribune
— 3:09 PM ET 10/16/2020
***ARTICLE HAS BEEN CONDENSED***
A hearing is scheduled for Tuesday and negotiations that have been underway for months are expected to be completed by then, according to the motion filed to extend the deadline to Monday.
What’s still being hammered amounts to millions of dollars of payout to various first-lien secured and unsecured debt holders.
All involved have consented to and are “actively participating in mediation discussions” with U.S. Bankruptcy Judge Marvin Isgur, according to the motion.
Plano-based Penney’s reorganization calls for it to emerge in two pieces. The operating company with about 700 stores will be sold to its biggest landlords, Simon Property Group (SPG) and Brookfield Property Group.
Separately 160 stores and six distribution centers are being put into a property company that will be owned by Penney’s secured lenders who will rent back the properties to the operating company. That master lease agreement is part of the ongoing mediation with the judge.
If completed as outlined, Penney will no longer own any of its 11 distribution centers, but it will still own more than 200 stores.
Penney entered bankruptcy in May with 11 distribution centers, five of them leased. Of Penney’s 846 stores, it owned 387 including 110 ground leases.
A sale hearing is tentatively set for Nov. 2. “It is absolutely critical to these estates that the OpCo (operating company) sale move forward and be approved in early November,” the filing said. “J.C. Penney will do whatever it takes to ensure that happens.”
Separately, an ad hoc equity committee made up of shareholders who stand to lose the value of their Penney stock, have filed motions and documents with the court reflecting their view that Penney shouldn’t have filed for bankruptcy in the first place.
Twitter: @MariaHalkias
