Bankruptcy Judge David Jones is urging a group of JCPenney Co. creditors, including Aurelius Capital Management, to submit a competing bid to buy the ailing retailer, Bloomberg News reported. The push comes as JCPenney, 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 JCPenney debt attacked the proposed deal this week, calling it overly generous to other creditors. They said that they’re pulling together their own bid. Josh Sussberg, a Kirkland & Ellis attorney representing JCPenney, 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 JCPenney stores and still let Simon and Brookfield take over the operations.
