JC PENNEY: Formation of Official Equity Committee Sought

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The ad hoc committee of equity interest holders of J.C. Penney Company Inc. asked the U.S. Bankruptcy Court for the Southern District of Texas to issue an order recognizing it as an official committee.

In court papers, the group said it should be recognized as an official committee to give the company’s equity interest holders “a legitimate voice with meaningful negotiating power in order to protect their interests.”

“Recognizing the ad hoc equity committee as an official committee will legitimize the efforts of the ad hoc equity committee and provide greater transparency in these bankruptcy cases,” the group said in court papers.

The group argued, among other things, that the company and its affiliates are “not hopelessly insolvent,” the interest of shareholders is not adequately represented by the companies or the unsecured creditors’ committee UCC; and that the potential cost to the bankruptcy estate is outweighed by the benefits of appointing an official equity committee.

The ad hoc committee is represented by:

Matthew S. Okin, Esq.
David L. Curry, Jr., Esq.
Johnie A. Maraist, Esq.
Okin Adams LLP
1113 Vine St., Suite 240
Houston, Texas 77002
Tel: 713.228.4100
Fax: 888.865.2118

About JC Penney

J.C. Penney Corporation, Inc., is an American retail company, founded in 1902 by James Cash Penney and today engaged in marketing apparel, home furnishings, jewelry, cosmetics, and cookware. The company was called J.C. Penney Stores Company from 1913 to 1924, when it was reincorporated as J.C. Penney Co.

On May 15, 2020, JCPenney announced that it has entered into a restructuring support agreement with lenders holding 70% of JCPenney’s first lien debt. The RSA contemplates agreed-upon terms for a pre-arranged financial restructuring plan that is expected to reduce several billion dollars of indebtedness. To implement the Plan, the Company and its affiliates on May 15, 2020, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-20182).

Debtors have tapped Kirkland & Ellis LLP and Jackson Walker LLP as their legal counsel, Lazard Freres & Co. LLC as investment banker, AlixPartners LLP as financial advisor, and Katten Muchin Rosenman LLP as special counsel. Prime Clerk is the claims agent, maintaining the page

Henry Hobbs Jr., acting U.S. trustee for Region 7, appointed a committee to represent unsecured creditors in Debtors’ Chapter 11 cases. The committee has tapped Cole Schotz P.C. and Cooley LLP as its legal counsel, Jefferies LLC as investment banker, and FTI Consulting, Inc. as financial advisor.

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