.....mall owners Simon Property Group and Brookfield Property Group......about $1.75 billion [ including debt they are acquiring ]....


Mall owners Simon and Brookfield to acquire J.C. Penney out of bankruptcy despite 'screaming matches'

....J.C. Penney has reached a tentative deal to sell its business and stores to a group of mall owners and lenders in a move that would save the department store chain from liquidation.

The retailer disclosed Wednesday during a bankruptcy hearing that it had struck the deal with Simon Property Group, Brookfield Property Group and a group of bankruptcy lenders.

The deal is expected to save more than 600 stores and 70,000 jobs. The company has separately announced plans to liquidate 242 locations.

J.C. Penney filed for Chapter 11 bankruptcy protection in May after temporary store closures due to the COVID-19 pandemic accelerated the company's troubles, which have been compounding for years.

The company's attorneys warned Aug. 31 that deal negotiations with prospective mall property owners had stalled, increasing the chance of total liquidation.

But Joshua Sussberg, a Kirkland & Ellis lawyer representing J.C. Penney, said Wednesday during a court hearing that the retailer had patched things up with its prospective buyers.

"We believe and feel comfortable that everybody will be rowing in the same direction," he said. "We’ve had a few screaming matches, including earlier today, but we got there."

Sussberg said the enterprise value of the deal, a figure that includes the value of debt being assumed, was $1.75 billion. Officials from Simon and Brookfield did not immediately respond to requests seeking comment Thursday afternoon.

Mall property companies have been getting more aggressive in recent years with a strategy of acquiring struggling tenants to preserve their rental income and minimize vacancies. In February, Simon was part of a group that agreed to buy fashion retailer Forever 21 out of bankruptcy, and in 2016, Simon was part of a group that bought fashion retailer Aéropostale out of bankruptcy.

The J.C. Penney deal would involve several elements, including:

• A $300 million investment by Simon and Brookfield, which are collectively expected to own most of the stores and the operating assets.

• The assumption of $500 million in J.C. Penney debt by Simon and Brookfield.

• The establishment of a real estate investment trust and a property holding company owning 161 J.C. Penney stores and distribution centers. These entities will be owned by J.C. Penney's first-lien lenders, which will rent the locations to the operating company owned by Simon and Brookfield.

• A $2 billion secured financing package from Wells Fargo.

The proposed sale serves as the starting bid in a bankruptcy auction process, which could theoretically result in the emergence of an alternative bidder. If J.C. Penney determines that this bid is the best option, it will present that proposal to Bankruptcy Judge David Jones, who has pressed J.C. Penney to do its best to avoid liquidation and save jobs. Jones must sign off for the deal to become finalized.

The plan is "the best path forward to maximize value for our stakeholders, ensure we keep the most stores open and associates employed, and position JCPenney to build on our over 100-year history,” J.C. Penney CEO Jill Soltau said in a statement.

When the deal is done, J.C. Penney will have about $1 billion in cash to continue operations, Sussberg said.

"It’s been an effort around the clock," he said. "We are in a position to move this into the end zone.".....


doesn't mean J.C. Penney will survive......they may just be buying their 'assets'.......?!

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I reject your reality and substitute my own!



Edited 2 time(s). Last edit at 09/09/2020 11:10PM by NewtonMP2100.

Dad sold shoes at JCP to pay for college and so my family grew up in their clothes. My wife has disdain for them for some reason (some things you ask about, some you leave alone) so I have not spent any money there for a long time.

After the redesign a couple of years ago; I was at the mall with my wife. I told her why are we at Macy's? She told me were at JCP! I was surprised at how clean and upscale it looked.

But it wasn't very crowded. I do like the clearance sections!

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San Antonio, TX (in the old city)


"All that is required for evil to prevail is for good men to do nothing." - Edmund Burke
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I suspect they're failing to attract younger shoppers.

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15 years ago, they sold my fav tighty whities. The brand has gone downhill at least 4 steps, but I still like the fit better than any other I have found. They also used to have some of the better printed t-shirts but the store that is local now does not have the selection that the previous one did.

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In tha 360. MRF User Map

They don’t carry my favorite JCP Stafford brand shirts anymore. I still buy my tighty whities and socks there.

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Saint Cloud, Minnesota, where the weather is wonderful even when it isn't.

When they tried to go upscale several years ago they brought in a bunch of PGA (Prof Golf Assn) branded clothes. At the end of the summer they marked them down to almost nothing. I bought enough shirts to last forever and enough shorts to last for 5 years. My wife bought some but not a huge amount because girl stuff apparently has more style than guy stuff and, heaven forbid she be seen on the golf course at 7:30 in the morning in clothes from 5 years ago!

The only value they are getting is the real estate that JCP owns. I doubt that the retail operation will survive.

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macphanatic
The only value they are getting is the real estate that JCP owns. I doubt that the retail operation will survive.

Hmm... I'll note that the real estate value of malls in general has collapsed....

Oh boy. I wish them luck, I really do, but this sounds like harnessing several dead horses together for increased speed.

J.C.Penny had a store in the Smithaven Mall (Long Island, NY), I would walk through J.C. Penny as a shortcut from the parking lot to the Apple Store. That was the extent of my "business" with J.C. Penny.

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testcase
J.C.Penny had a store in the Smithaven Mall (Long Island, NY), I would walk through J.C. Penny as a shortcut from the parking lot to the Apple Store. That was the extent of my "business" with J.C. Penny.

What, not even a "M'lady" to the gals spritzing perfume as you walked by?

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cbelt3

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macphanatic
The only value they are getting is the real estate that JCP owns. I doubt that the retail operation will survive.

Hmm... I'll note that the real estate value of malls in general has collapsed....

Didn't say it had great value, but it has value. The rest is worthless. I could see the malls buying the anchors so that they have control. Otherwise, Amazon or anyone else can buy the buildings and pretty much do whatever zoning/code allows.