(Bloomberg) -- U.S. Bankruptcy Judge David Jones is urging a group of J.C. Penney Co. creditors including Aurelius Capital Management to submit a competing bid to buy the ailing retailer.
“I want to see what your folks can do,” Jones said in a telephonic court hearing Wednesday. “I want to see it sooner rather than later.”
The push comes as J.C. Penney, its biggest landlords and holders of most of its senior debt work to execute a bid that would rescue the company by October 16. The deal -- which would see Simon Property Group Inc. and Brookfield Property Partners buy the retailer's operations and keep stores open -- was announced nearly a month ago but no definitive agreements have been signed.
A group of creditors including Aurelius that hold $162 million of term loans and other J.C. Penney debt attacked the proposed deal this week, calling it overly generous to other creditors. They said they're pulling together their own bid.
Josh Sussberg, a Kirkland & Ellis attorney representing J.C. Penney, said any competing bid would have to top $2.47 billion to repay the retailer's bankruptcy loan and first-lien debt, which would be forgiven as part of the existing offer. An attorney for the Aurelius group disagreed, arguing they could offer to buy a swath of J.C. Penney stores and still let Simon and Brookfield take over the operations.
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