JCP Shareholder - Prepetition Meaning

[JCP]

Hi. I purchased shares of JC Penney in June/July 2020 after JC Penney (JCPNQ) filed for Chapter 11 on May 15, 2020. There's some initial language around whether there would be equity coming out of bankruptcy for prepetition (pre-petition) shareholders in the near future. This is just talk about but is pre-petition defined as either:

1) Shares bought BEFORE the BK filing on 5/15
2) Shares already in the float before the BK filing versus NEW offering shares sold on the exchange after 5/15

I'm just trying to understand the meaning of pre-petition (and post-petition).

Thanks for your help!

[justbroke]

Welcome to BKForum.

For bankruptcy terms, pre-petition means everything before the day on which the debtor filed; in that case it's JC Penny. So anything that happened before 5/15/2020 is pre-petition. Everything after 5/15/2020 is post-petition.

Bankruptcy deal with pre-petition things differently than post-petition. Pre-petition debts and "property" are part of the bankruptcy, while post-petition debt (and possibly any "newly" acquired property) are not part of the bankruptcy.

[JCP]

Thanks for the welcome. So to clarify, does buying common shares (JCPNQ) in June still be categorized as pre-petition shares if there were NO new share offerings by JCP after 5/15?

[justbroke]

I can't answer that question. You need to review this with a broker that understands those shares . Additionally, and I think this goes to the heart of your question, the bankruptcy may have affected shares "issued" before 5/15. It's a legal distinction that I can't answer.