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J. C. Penney Company, Inc. Message Board

yahutag 6 posts  |  Last Activity: Jul 10, 2016 8:55 AM Member since: Mar 18, 2012
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  • Reply to

    oh poo, here we go

    by krnewman Jun 30, 2016 5:18 PM
    yahutag yahutag Jul 1, 2016 8:03 AM Flag

    The document refers to an agreement to provide debtor in possession financing. That indicates that a trip through bankruptcy court will take place. I expect that existing common stockholders will get a piece of the action, but that piece is unlikely worth less than $0.20 per share.

  • Reply to

    oh poo, here we go

    by krnewman Jun 30, 2016 5:18 PM
    yahutag yahutag Jul 2, 2016 8:29 PM Flag

    NBR tried to dump some unprofitable assets on C&J in exchange for an equity stake. They probably knew at the time that their effort was of questionable merit, but was more interested in saving NBR.

  • Reply to

    Chapter 11 approved!!

    by ezzeno Jul 8, 2016 10:20 PM
    yahutag yahutag Jul 10, 2016 8:55 AM Flag

    Every bankruptcy is different. CJES is not comparable to SUNE because SUNE has a cash flow problem arising from operating problems, made more complex by way of an asset valuation problem. CJES had no cash flow problem, but had violated a loan covenant, potentially resulting in a cash flow problem by way of triggering a default. The matter was then addressed with negotiation, making the CJES bankruptcy more orderly. However, in both cases the final resolution will depend on the value given to assets, and the capital structure appropriate to a return to normal operation.

  • Reply to

    Chapter 11 approved!!

    by ezzeno Jul 8, 2016 10:20 PM
    yahutag yahutag Jul 9, 2016 8:28 AM Flag

    All you will have in exchange for your shares is the right to buy additional shares at a price yet to be determined. In other words, you can participate in the equity rights offering.

  • Reply to

    Chapter 11 approved!!

    by ezzeno Jul 8, 2016 10:20 PM
    yahutag yahutag Jul 8, 2016 11:12 PM Flag

    It's unlikely that your shares will be worth anything once the bankruptcy is completed.

  • yahutag yahutag Jul 8, 2016 5:38 PM Flag

    I expect that Chapter 11 will be declared when they get agreement on a detailed plan to issue new equity to existing bond holders. Since there are many creditors, all with varying security levels, it takes time to get everyone on board.

    The new equity is not likely to be issued side by side with the existing equity. The creditors will not be willing to share much, if any, value with existing common stockholders. In the case of SWFT, which was very similar, existing common holders received 4% of the new common, plus warrants with an exercise price set high enough to insure complete recovery by creditors. Something of that nature is likely to be the case with CJES. By the way, SWFT entered Chapter 11 in order to cancel existing equity, and issue new.

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