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By Jeremy Hill and Eliza Ronalds-Hannon | Bloomberg
J.C. Penney Co.’s lenders have agreed to team up with mall landlords Simon Property Group and Brookfield Property Partners to buy the bankrupt chain of department stores.
The tentative rescue deal, which would preserve about 70,000 jobs, includes a $300 million equity investment by the landlords, a lawyer for J.C. Penney said at a Wednesday bankruptcy hearing in Texas.
The Wall Street Journal reported earlier that the deal is valued at about $800 million, with the mall owners taking about 490 of the chain’s 650 stores. Lenders would swap some of their debt for control of another 160 locations and the distribution centers, which would be rented back to the landlords, the Journal reported.
The lender group was already set to take over most of J.C. Penney’s real estate at the outset of the bankruptcy case, with a plan that would have involved spinning the properties into a real estate investment trust and selling the rest of the retailer to the highest bidder. The attempts to reach a sale agreement with outside bidders hit roadblocks as the case dragged on.
The case is J.C. Penney Company Inc., 20-20182, U.S. Bankruptcy Court for the Southern District of Texas (Corpus Christi).
Source:: Los Angeles Daily News
