A Texas federal court judge cleared the way for J.C. Penney to be sold next week and exit bankruptcy soon after.
U.S. District Court Judge Nelva Gonzales Ramos rejected a motion to stay the sale of Penney to its two biggest mall landlords and its first-lien debtholders while a committee of equity holders prepared to file an appeal.
It was the last gasp for Penney shareholders, many longtime investors and retirees, who have tried to show that the retailer has more value than the pending sale indicates. The sale will leave them holding shares that are worth nothing.
“I understand this is a difficult situation and far from ideal and emotional for many present and not present, and I’m sorry about that,” Gonzales Ramos said during the conference call hearing that had more than 200 people listening in.
The shareholder group failed to prove that a stay and appeal would result in any likelihood of success for them, and the judge said that it would harm the other parties involved.
The shareholder committee had filed the motion on Tuesday. U.S. Bankruptcy Court David Jones had already approved the sale, which is expected to close Monday, said Andrew Leblanc of Milbank and lawyer for the lenders.