A US bankruptcy court has approved JCPenney’s plan to create separate property holding companies for its 160 of its real estate assets and all of its owned distribution centres. The so-called ‘PropCos’ are expected to complete the restructuring process and emerge from Chapter 11 bankruptcy protection in the first half of 2021.
The plan has been approved by the US Bankruptcy Court for the Southern District of Texas. The PropCos will be owned and operated by JCPenney’s debtor-in-possession (DIP) and first lien lenders.
The move will follow the asset purchase agreement (APA) inked with Brookfield Asset Management, Simon Property Group and a majority of its lenders to acquire most of the department store company’s retail and operating assets for US$1.75bn.
JCPenney, which is one of the US’s largest apparel and home retailers, filed for Chapter 11 bankruptcy protection in May, after its fourth-quarter net income slid to US$27m from $75m a year earlier. In July it outlined plans to axe about 1,000 jobs and close 152 stores.