• Analyzed company’s business plan and assets    
  • Produced expert reports and testimony   
  • Identified valuation in excess of value alleged by lenders                                                                              

JCPenney is a publicly traded company with 846 corporate locations and 12B in annual revenue that elected to file Chapter 11 bankruptcy due to COVID-19 shutdowns, C-suite turnover, and changes to the business and merchandising plans. CR3 Partners was retained as financial advisor to Ad Hoc Equity Committee to analyze business plan and assets to produce two expert reports regarding business condition and valuation range. CR3 provided significant expert witness at the sale and confirmation hearings in support of valuation in excess of value alleged by lenders.

The Situation

  • JCPenney is a publicly traded company with 846 corporate locations and $12B in annual revenue
  • Company was impacted by COVID-19 pandemic and government shutdown orders in March 2020, along with other retailers
  • Projecting an extended shutdown, company believed it would run out of money by July 2020 and elected to file Chapter 11 bankruptcy
  • Company struggled prior to COVID, with significant turnover in the executive suite that resulted in changes to business and merchandising plans

The Work

  • CR3 Partners was retained as financial advisor to Ad Hoc Equity Committee (AHEC), which represented both sophisticated and inexperienced retail shareholders
  • When AHEC was formed, retailers had begun to open, online sales were doing well, and company averted a liquidity crisis as cash grew to $1.5B
  • Improved financial conditions indicated that equity value remained
  • Produced report and provided expert testimony regarding equity value

The Results

  • Analyzed company’s business plan and assets, as well as other distressed retailers, and produced two expert reports regarding condition of business and potential valuation range
  • Provided significant expert witness testimony at sale and confirmation hearings in support of valuation in excess of materially distressed value alleged by lenders to convey assets to first-lien lenders and landlord buyer group

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