The battle for the bid is getting hotter!
As per a Bloomberg report, the US Bankruptcy court on Monday (26 October) saw lot of tension with lenders of the retailer saying that a group of dissenting creditors was a waging ‘economic terrorism’.
It definitely does not seem to be an exaggeration to state it ‘economic terrorism.
The creditors led by Aurelius Capital Management recently submitted a competing proposal to acquire JCPenney’s retail estate while at the same time allowing Simon Property Group and Brookfield property to take over retailer’s operations.
Condemning the proposal, Andrew Leblanc of Milbank – the other lender group – said in a court hearing on Monday that the above proposal was an attempt by lenders to extract premium.
Under the JCPenney plan, its retail and operating assets are to be sold to shopping mall operators Brookfield Asset Management, Inc. and Simon Property Group.
Meanwhile, the creditors led by Aurelius Group, has said that the deal is structured in a way that will help deliver 162.4 per cent recovery for debtor-in-possession lenders – leaving them with a recovery of only 10.3 per cent.
Under the competing bid, it is reported that debtor-in-possession lenders will get back 100 per cent of their money, while allowing the minority group to get back 46.1 per cent of JCPenney’s outstanding US $ 1.57 billion of first-lien debt.
Reportedly, the bankruptcy judge had yesterday ordered landlords and debtor-in-possession lenders to finalise a master lease agreement.
We will keep you updated on latest developments!