US Bankruptcy Judge David Jones has urged a group of JCPenney creditors to submit a rival bid so as to buy the struggling retailer.
The group of creditors, which include Aurelius Capital Management that holds US $ 162 million of term loans and other JCPenney debt, earlier this week, had slammed the deal wherein Simon Property Group and Brookfield Property Partners would buy the retailer’s operations.
The creditors had said that the aforementioned deal was overly generous to other creditors.
Consequently, the group of creditors, including the Aurelius Group, decided to come out with their own bid.
Urging them to do it at the earliest, the bankruptcy judge said “I want to see what your folks can do.”
According to Josh Sussberg, a Kirkland & Ellis attorney representing JCPenney, any rival bid will have to beat US $ 2.47 billion to repay retailer’s bankruptcy loan and debt, which would be forgiven as a part of the existing offer.
Meanwhile, attorney of Aurelius Group has said that it can acquire large number of JCPenney stores and still allow both Simon and Brookefield buy the retailer’s operations.
However, JCPenney’s lawyers have said that any challenge could not only be expensive but also a time consuming court battle, which would cause hindrance to retailer’s plans to exit from Chapter 11.