J.C. Penney Lender Fight Shows Competing Bankruptcy Interests
As the J.C. Penney bankruptcy heads toward a hearing next week on its planned sale, the conflict between the retailer’s majority and minority lender groups has still not abated.
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The conflict, some version of which plays out in many bankruptcies, shows how competing interests in a Chapter 11 can clash in a process in which many groups of creditors are often asked to accept reduced recoveries, attorneys said.
“Somebody is out of the money, and somebody is in the money…and objections [can be] a means of trying to extract value for that particular constituency,” said Joel Shapiro, partner at Blank Rome LLP, who isn’t involved in the Penney’s case and spoke broadly.
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“J.C. Penney Lender Fight Shows Competing Bankruptcy Interests,” by Sindhu Sundar was published in WWD on October 27, 2020.