Forever 21’s Junior Creditors Take Jab at Senior Lenders

Some junior creditors to Forever 21’s bankrupt US operator are questioning how senior lenders are being treated in the Chapter 11 case.

A group of unsecured creditors raised an objection to the company’s reorganization plan, according to court papers dated May 5. Secured lenders are not “truly impaired,” the group said, referring to $1.09 billion of asset-based loan claims, a $321 million term-loan claims and $176 million subordinated-loan claims.

The secured lenders will be “repaid in full” and the reorganization plan will also provide them with broad releases, the group said. Their allegations are in contrast to Forever ...