J. C. PENNEY EXPECTS TO EXIT CHAPTER 11 AHEAD OF HOLIDAY SEASON

JCPenney said on Wednesday that it expects to emerge from bankruptcy protection before December under a new ownership agreement.

The struggling 118-year-old retailer said in a news release that it has taken another step toward a sale to U.S. mall owners Brookfield Property Partners and Simon Property Group. It has filed a draft asset purchase agreement, which gets it closer to a deal. The deal is still subject to court approval and other conditions. A hearing is set for early November, the company said.

In September, the retailer announced that Simon and Brookfield intend to acquire substantially all of the 118-year-old department store’s retail and operating assets for $1.75 billion with a combination of cash and debt, the companies said in a statement.

In addition to the purchase of its operations, JCPenney is forming a separate real estate investment trust and a property holding company, including 161 of its real estate assets and all of its owned distribution centers. According to JCPenney attorney Joshua Sussberg of Kirkland & Ellis, the deal is expected to keep intact more than 600 stores and 70,000 jobs.

“This is another important milestone in our restructuring plan, bringing us one step closer to finalizing the APA, closing the sale process, and exiting Chapter 11 ahead of the December 2020 holiday season,” said Jill Soltau, chief executive officer of JCPenney. “Our talented team is focused on working with Brookfield and Simon to build on our over 100-year history of serving customers and working seamlessly with our vendor partners. We look forward to completing this sale and continuing our progress implementing our plan for renewal to offer compelling merchandise, drive traffic, deliver an engaging experience, fuel growth, and build a results-minded culture.”