Most Recent Articles In Fashion Scoops
Latest Fashion Scoops Articles
- Tom Cruise Lands at Ladies' Day at Goodwood
- No. 21 Plots Retail Expansion
- Diego Della Valle Speaks Up
More Articles By
J.C. PENNEY HAS THE BOND BLUES: J.C. Penney Co. Inc. is fighting with its bondholders over a claim of default in connection with debentures issued by the retailer back in 1994 and due in 2037. The company said Monday it is seeking legal remedies in a Delaware Chancery Court that include injunctive and declarative relief stating that the default claim is invalid and without merit.
Bondholders allege that the retailer violated a legal document called an indenture when it entered into an inventory-secured credit agreement in January 2012 without providing collateral to the bondholders. The retailer said the inventory-secured agreements do not trigger an event of default under the indenture, a “negative covenant that extends only to ‘principal property,’” and does not include inventory. J.C. Penney also said it has in the past 10 years entered into similar agreements with no bondholder allegations of any alleged violation of the indenture.
By sending a purported Notice of Default, the bondholders are seeking early payment of the bond, or over $300 million, unless the alleged violations are cured in a timely manner. J.C. Penney’s legal request is for an order barring a declaration of default as well as a separate statement from the court that the retailer is not in violation of the debenture.