Investor Power Struggle at JC Penney ✊

Investor Power Struggle at JC Penney

JC Penney has made a 45-million-dollar commitment to secure 900-million-dollars’ worth of interim financing. The deal gets bankruptcy over and done with quickly, but it requires the retailer to write up a new business plan and re-enter the corporate world as a real estate investment trust. The firm doesn’t want to give up, it wants to restructure, but there was a better deal on the table and investors are furious it was refused!

This $900 million deal was offered by a group of senior secured lenders, and another $900 million deal was offered by a group of junior unsecured lenders. The junior’s didn’t ask for a $45 million commitment fee and would even give JC Penney free rein to decide its future and perhaps close fewer stores and save more jobs. However, seniors are seniors.

The retailer owes its senior debtors more than its junior debtors, so the seniors debtors are using that to their advantage. They’re saying that if the firm doesn’t accept their deal and future vision, they’ll push for chapter seven bankruptcy, a ruthless asset strip that will result in total death for the company, instead of allowing the firm to restructure. It’s “predatory lending,” according to the juniors. A hearing is taking place today!

These investor wars are becoming all too common and can pummel a stock still trading when they break out. The shares here would be down big if they hadn’t ceased trading, and would rise if the juniors got justice. It could be that both groups are fighting over scraps; JC Penniless could fail in restructuring. Will we ever see it again?

Share:
More Posts
Get your daily Invstr Crunch

Get the market news and updates you need, delivered to your inbox or available on our daily podcast.

Risk Disclosure:

Invstr is not a bank and banking services are provided by Vast Bank, N.A.

Brokerage and Banking services are currently only available to U.S. residents.

Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Invstr app and web services are provided by Invstr Ltd. Invstr+ advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC). Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value. Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying or holding digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Your digital account does not support wallet to wallet transferring of your digital assets (i.e. cryptocurrencies) outside the platform. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC. The Invstr Visa® Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

Watchlists provided when users first access the service are not a recommendation to invest. Instead they are provided to help users better navigate the service. Users are free to edit and create their own watchlists. From time to time, Invstr will suggest instruments solely based on an individual’s interest and the interest levels of the Invstr community. The statistical and portfolio builder models generated by Invstr do not reflect actual investment results and are not guarantees of future results. Comments provided by Invstr leaders, influencers or members of the Invstr Community are not recommendations and should not be construed as such. Invstr does not endorse the content or the positions posted by them. Their investment approach, and that of the models provided by Invstr, may be different from yours and may not be appropriate for you.