JC Penney Rallies Amid Bondholder Concerns
Shares of J.C. Penney (NYSE: JCP) rallied almost three percent early on Tuesday amid concerns that the company was in violation of a bondholder agreement.
The law firm Brown Rudnick, representing half the holders of J.C. Penney's 7.4% bonds due 2037, alleges that the company violated part of its agreement with the bond holders when it failed to provide security for the holders in an inventory credit agreement made last January.
In response, J.C. Penney filed a lawsuit on Monday to stop the bondholders from declaring that the company had violated the agreement.
Zerohedge speculates that, behind the scenes, it might be none other than Carl Icahn going after J.C. Penney. Icahn has a long history of corporate raiding, and forcing J.C. Penney into an involuntary default wouldn't be beyond his typical behavior.
Icahn is also, quite publicly, continuing to feud with rival hedge fund manager Bill Ackman.
Ackman sued Icahn 10 years ago after a deal between the two noted investors went sour. Even though it was a decade ago, the bad blood between the two remains: Last month, Ackman and Icahn attacked each other publicly on CNBC.
Interestingly, Ackman is one of J.C. Penney's largest shareholders, owning nearly one-fifth of the company.
Shares of J.C. Penney traded near $20 on Tuesday.
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