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The JCPenney Lawsuits Begin

Tyler Durden's picture





 

Last Thursday when we reported the surreal sequence of investor disinformation events facilitated by both JCP's management team, CNBC and a conflicted "source", we said that "it was only a matter of time before lawyers started making phone calls, and before someone got implicated in what in retrospect can be construed as very serious, and costly, 10(b)-5 securities fraud." Sure enough, it took a little under 48 hours before the first (of many) lawyers smelled blood, and resulted in Shareholder Rights Law Firm Johnson & Weaver, LLP starting an investigation " if a securities violation was committed by J.C. Penney Company, Inc., when it made specific representations about the company's liquidity and the need to raise cash." The answer: yes. The only question is who is guilty, and how much the settlement will be for all those who lost cash on the second most active trading day of JCP stock in history (followed only by the next trading day in which the stock tumbled another 6% from the Goldman follow on offering price to a fresh 13 year low).

From BusinessWire:

Shareholder Rights Law Firm Johnson & Weaver, LLP is investigating if a securities violation was committed by J.C. Penney Company, Inc., (NYSE: JCP) when it made specific representations about the company's liquidity and the need to raise cash.

 

On an August 20, 2013 investor conference call, J.C. Penney's CFO responded when asked about any additional outside liquidity needs, "Certainly as we look through the end of the year, the $1.5 billion of liquidity that we have projected we're not assuming that we need any additional financing". Other recent statements have been reported by senior management, including the Company's CEO, stating that it did not see conditions for the rest of the year where it would need to raise liquidity.

 

On September 26, 2013, J.C. Penney announced that it had commenced an underwritten public offering of 84 million shares of its common stock. Based upon the closing price of $10.42 on September 26, 84 million JCP shares would sell for about $875 million. On this news JCP stock closed down 13% the next trading day to $9.05.

 

If you are a J.C. Penney shareholder and are interested in learning more about the investigation or your legal rights and remedies, please contact lead analyst Jim Baker (jimb@johnsonandweaver.com) at 619-230-0063.

 

Johnson & Weaver, LLP is a nationally recognized shareholders' rights law firm. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits. For more information about the firm and its attorneys, please visit http://www.johnsonandweaver.com.

 


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Sun, 09/29/2013 - 10:44 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Couldn't have happened to a better bunch of inept pricks.

Sun, 09/29/2013 - 11:30 | Link to Comment HulkHogan
HulkHogan's picture

I am going to buy some JCP stock very soon, and I'm serious about that. I was in a JCP yesterday, and that place was packed. All this talk about the problems at JCP has brought customers back. I'll wait until the end of October and then I'm buying.

Sun, 09/29/2013 - 12:09 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Well, not me!  In this kind of ever-cheating ever-greedy environment it is impossible for me to sort out the legit companies from the slime.  BAD (in all senses of the word) regulation just makes it worse.

Cronyism at its worse.  Don't put your money at risk unnecessarily!

***

Hey, I think we are good & ready for the big experiment: shut her down!  Would be very interesting to see the results.

Sun, 09/29/2013 - 16:18 | Link to Comment smlbizman
smlbizman's picture

hulk, are you taking ur vitamins and saying ur prayers......cause whatcha gonna do when reality runs wild over you....brother

Sun, 09/29/2013 - 12:16 | Link to Comment Libertarian777
Libertarian777's picture

very very good investment logic. Worked for me!

Back in 2007, Northern Rock has very long lines. People were rushing to get into the bank. I sold my house, took out a loan and bought as much stock of the bank as I could!

Back in 2008, Lehman Brothers had very long lines. You couldn't even get anyone to answer the phone they were so busy. I knew they were a good investment, so I sold my house, took out a loan and bought as much stock as I could!

Earlier this year, all these Cypriot banks had (virtual) long lines, people were lining up to get into the bank. I sold my house, took out a loan and bought as much stock as I could!

 

Sun, 09/29/2013 - 12:50 | Link to Comment Atomizer
Atomizer's picture

I sold my house, took out a loan and bought as much stock as I could!

Why would someone ever take out a loan to buy stock? What ever happened to the capital gains in selling your home? Such a fucked up story you tell. Sorry, just being honest.

Sun, 09/29/2013 - 12:53 | Link to Comment Disenchanted
Disenchanted's picture

Damn! He sold his house three times...same house?

Sun, 09/29/2013 - 14:11 | Link to Comment mkhs
mkhs's picture

Have you never heard of rehypothecation?

Sun, 09/29/2013 - 15:28 | Link to Comment Theosebes Goodfellow
Theosebes Goodfellow's picture

"very very good investment logic. Worked for me!

Back in 2007, Northern Rock has very long lines. People were rushing to get into the bank. I sold my house, took out a loan and bought as much stock of the bank as I could!

Back in 2008, Lehman Brothers had very long lines. You couldn't even get anyone to answer the phone they were so busy. I knew they were a good investment, so I sold my house, took out a loan and bought as much stock as I could!

Earlier this year, all these Cypriot banks had (virtual) long lines, people were lining up to get into the bank. I sold my house, took out a loan and bought as much stock as I could!" </sarc>

Fixed!

Sun, 09/29/2013 - 18:48 | Link to Comment Thomas
Thomas's picture

Y'all need sarcasm detectors.

Sun, 09/29/2013 - 12:57 | Link to Comment Dark Space
Dark Space's picture

When there is a line at a bank, there is a problem. When there is a line at a retail store, things are going good. Your logic was faulty, which is why you now have effectively lost the equivalent of three houses in less than 6 years. I'm a libertarian too, though, so I support your ability to make bad decisions and pay for them yourselves, and do not think we should bail you (or those banks) out...

Sun, 09/29/2013 - 15:02 | Link to Comment Papasmurf
Papasmurf's picture

You may want to look at a chart for ALU for 2001 onwards for your model of what the JCP recovery will look like.

Sun, 09/29/2013 - 16:50 | Link to Comment 11b40
11b40's picture

What happens to that stock when they file Chapt 11, sometime between 12/15 and 1/30/14 when they are flush with cash from customer sales....unless they get cut off by their supploiers sooner.  The tactic is well know as a strategic filing, and practiced to perfection in the 90's and forward.

Be sure to let us know how that works out for you.

Sun, 09/29/2013 - 10:45 | Link to Comment Seasmoke
Seasmoke's picture

We are allowed to lie now......So no problems here. 

Sun, 09/29/2013 - 11:12 | Link to Comment Handful of Dust
Handful of Dust's picture

JCP is not a Big Bank. They are not allowed to lie.

Sun, 09/29/2013 - 11:39 | Link to Comment knukles
knukles's picture

Goldman sez:  "Well, don't look at us, we had nothing to do with the interview where Penny management spilled the beans.  Of course we knew about Everything (Squids are all seeing, dontchakno) but We never Violated any Securities Law.  Our people were too busy entertaining the Diplomats in town for the UN General Assembly at the Strip Clubs making arrangements for Greeks Bearing Gifts Type Off Budget Financings.  It's all for God and the Chillen' dontchaknw?"
Booyah*, peasants!

 

Yes Boss, I got photos of them with the donkeys.  Not like that's not normal practice back home for 'em but these donkeys were dressed up in drag!

 

*Def: Booyah!;  As in, Fuck You.  Up yours.  Suck it.  Bend over.  A TechnicaWall Street term of endearing client communications

Sun, 09/29/2013 - 10:53 | Link to Comment Everyman
Everyman's picture

I hope CNBS is named as well.  I think they are culpable as well for the BS they spout.  Hell, Jimmie Kramer telling everyone to buy.  How much more of an idiot do they ned to have right before their very eyes?

Sun, 09/29/2013 - 12:31 | Link to Comment yogibear
yogibear's picture

CNBS has deep pockets. Hope the law teams go after them big time to recoup their losses. CNBS realeases rumors and hypes stocks. Lawyers need subpoena thr CNBS producer emails and thier intent to defraud viewers. Hit them hard attorneys!

Sun, 09/29/2013 - 10:57 | Link to Comment IMA5U
IMA5U's picture

Golden Scrote slapped an UNDERPERFORM on the credit right in front of the equity offering!!

What a "set up" for the stock to tank

Wait, Goldman also banked the equity deal???

Oh my!!!??

Wonder who made a killing on all this...

Sun, 09/29/2013 - 11:39 | Link to Comment Doyle Hargraves
Doyle Hargraves's picture

"Wonder who made a killing on all this..."

Which is why the lawsuit will never go anywhere.

Goldman can't lose, and in order to prosecute this they would have to dig deeper which I am sure would have plenty of GS fingerprints all over it.

Fuck off, stuttering Hank and Blankfein.

There are exclusive parts of Hell reserved just for those pricks at Goldman.

Sun, 09/29/2013 - 11:40 | Link to Comment knukles
knukles's picture

The violation of securuties law appears to have been made by the JCP management commenting on the telly....
Goldilocks ...
Ohnevermind...
It's Penny management in trouble.

Sun, 09/29/2013 - 11:57 | Link to Comment Emergency Ward
Emergency Ward's picture

The hairy hand$ of Goldman $ach$ pulling the $tring$.

Sun, 09/29/2013 - 11:01 | Link to Comment mofreedom
mofreedom's picture

JCP was a depressing store some 25 years ago...should have long been euthanized right along side Wards, Woolworth and Gambles. 

Sun, 09/29/2013 - 11:43 | Link to Comment knukles
knukles's picture

Gambles...
There's a blast out of the past!

Another piece of ma and pa kettle"ish" tyep LBO'd to death.
Who'da LBO'd Gambles, FFS?
Jesus people....

http://en.wikipedia.org/wiki/Gamble-Skogmo

Sun, 09/29/2013 - 13:16 | Link to Comment mofreedom
mofreedom's picture

and how much did GE lose keeping Wards afloat.  hubris never learns.  we should stop funding this POS government now and cut our losses.  i dont have any more trillions to flush down the toulet.

Sun, 09/29/2013 - 11:04 | Link to Comment Atomizer
Atomizer's picture

In J.C. Penney's Ongoing Drama, Retailer Manages To Alienate Suppliers, Too

 

JCP will be one of the first to close doors due to self-checkout debacle. I hope you haven’t bought all the new iris scanning, and facial recognition equipment yet. See JCP, the dirt bags that sold you the concept of future shopping will be going out of business as well. The public won’t stand for this evasive behavior.

Sun, 09/29/2013 - 11:06 | Link to Comment Tinky
Tinky's picture

Not to mention invasive behavior.

Sun, 09/29/2013 - 11:21 | Link to Comment Atomizer
Atomizer's picture

That too. Looking from another whole different angle based on my statement above.

The Future of Retail Banking

Sun, 09/29/2013 - 11:05 | Link to Comment Bearwagon
Bearwagon's picture

Are you all living in the past?! This is NOTHING! Piece of cake! And nothing will happen, just wait and see for yourself, you don't have to trust me.

Sun, 09/29/2013 - 12:10 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

I believe you, but I'm not sure I trust you...  

          :)       :p

Sun, 09/29/2013 - 11:09 | Link to Comment WallowaMountainMan
WallowaMountainMan's picture

"we're not assuming that we need any additional financing"

"that it did not see conditions for the rest of the year where it would need to raise liquidity."

both easily defended as telling of truth as far as legalize speak goes. first one simply says that in the forecast they used, they did if fact not assume that they would need any additional financing, not that they thought they would or would not. the second one simply saws they failed to foresee the future and in fact could be taken as a warning for those who did and wanted to 'bet' against them.

needs to be much more or no lawsuits win...

just a guess.

:)

Sun, 09/29/2013 - 11:29 | Link to Comment Handful of Dust
Handful of Dust's picture

Agree. Execs are impossible to sue and win...look at Richard Scott as Columbia HCA, ENRON execs, most of the bankers in the 2008 frauds, the rating company execs, and many, many others.

Simply say, "I was relying on data from my lawyers, accountants, or just about anyone else but my own."

"Based on the information I had at the time, those were my opinions. New facts were presented me so my opinions changed."

If you rely on any info 'management," MSM, brokers or realtors tell you, without independatly verifying it on your own with solid data, then you deserve what you get.

That being said, I hope jcp is able to turn around since I still prefer their store to the absolute crap that would replace the empty black hole in the mall they leave behind.

 

Sun, 09/29/2013 - 11:09 | Link to Comment BlueStreet
BlueStreet's picture

The CNBS headline denying the rumors said the story was absolutely not true but the story itself said the rumor was misleading.  What kind of shit reporting is that. Anyone who just read the headline and not the story and held on to their stock because of it got reamed right up the ass. Forget about shutting down the gov't they should shut down that trash channel. First in business worldwide, what a joke. 

 

 

Sun, 09/29/2013 - 11:11 | Link to Comment azzhatter
azzhatter's picture

Which CNBS jackoff reporter broke this? Hopefully that cocksucking smug asshole Kernan

Sun, 09/29/2013 - 11:14 | Link to Comment glenlloyd
glenlloyd's picture

let's see....judicial system involved....well could go either way I guess. Regardless as to whether the claim is valid, and it certainly looks like it is, there are so many things under the surface that we don't see that have a bearing on the case.

Sun, 09/29/2013 - 11:41 | Link to Comment I am Jobe
I am Jobe's picture

Greatest minds. Yup, MBA's and so called business leaders. What a fucking joke USSA Corporations have become. 

Sun, 09/29/2013 - 12:26 | Link to Comment williambanzai7
williambanzai7's picture

JCP

Sun, 09/29/2013 - 16:21 | Link to Comment Real Estate Geek
Real Estate Geek's picture

WB, your expression of the dollar sign as reminiscent of a swastika is a powerful image.  Kudos.

Sun, 09/29/2013 - 16:26 | Link to Comment Real Estate Geek
Real Estate Geek's picture

But what is the image on Hitler's armband?

Sun, 09/29/2013 - 12:30 | Link to Comment Yen Cross
Yen Cross's picture

  Put a fork in it!  J.C.P. is done.   I'm sure some bottom feeding vulture/private equity fund will pick up the scraps and resurrect the name.

  Just like Twinkies®

Sun, 09/29/2013 - 13:20 | Link to Comment Orly
Orly's picture

Could it be possible that Cramer does the perp-walk out of the studio?

:0

Sun, 09/29/2013 - 13:48 | Link to Comment 22winmag
22winmag's picture

These "disinformation events" don't hold a candle to the level of bullshit surrounding Obmamcare.

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