J.C. Penney’s talks for rescue stall
- 01 Sep 2020
J.C. Penney’s talks with landlords for a rescue from bankruptcy proceedings reached an impasse, pushing the department store to the brink of collapse unless it can reach a deal within days to be taken over by lenders.
Discussions between the Plano, Texas-based retailer and a duo of mall owners Simon Property Group Inc and Brookfield Property Partners LP stalled over the weekend, Joshua Sussberg, a J.C. Penney lawyer at Kirkland & Ellis LLP, said during a Monday court hearing. The negotiations have dragged on in part over lease terms, according to people familiar with the matter. Sussberg did not detail that or any other specific sticking points during Monday’s hearing. Sussberg said lenders were still prepared to rescue the 118-year-old company and more than 70,000 jobs depending on negotiations over the next 10 days.
A lawyer for the lenders, Andrew Leblanc of Milbank, said there were “lots of hurdles” to reaching such a deal, describing negotiating an agreement on a short timeframe as a “heavy lift.” The two sides set a Sept.10 deadline.
Simon did not immediately respond to a request for comment while Brookfield declined to comment.
J.C. Penney, which filed for bankruptcy in May after the coronavirus pandemic forced it to temporarily close the nearly 850 stores it operated at the time, is racing to reach a deal that would carve it into three parts. One would be an operating company housing its retail business, including intellectual property and hundreds of stores. Lenders would forgive portions of J.C. Penney’s $5 billion debt load to take control of two real estate investment trusts. One would hold 160 properties, with the other controlling the company’s distribution centers, Sussberg said.
Reuters
