Sale of J.C. Penney gets court approval

The deal to save J.C. Penney has been approved by bankruptcy court.

The U.S. Bankruptcy Court for the Southern District of Texas approved the deal, which will allow the 118-year-old retailer to emerge from bankruptcy in time for the holiday shopping season. The agreement is expected to save approximately 60,000 jobs.

As previously reported, under the terms of the transaction, Simon Property Group and Brookfield Property Partners will acquire Penney’s retail operations for $1.75 billion in cash and debt. The agreement also includes the formation of separate property holding companies, made up of 160 of Penney’s real estate assets and all of its owned distribution centers, which will be owned by a group of the company’s lenders. Brookfield and Simon will enter into master leases with the lenders for the properties and distribution

In addition, the retailer’s lenders will forgive $1 billion in debt in exchange for 160 properties and six distribution centers.

“With the 2020 holiday season in full swing, we are excited to operate under the new ownership of Brookfield and Simon outside of Chapter 11 and under the J.C. Penney banner,” stated CEO Jill Soltau. “We appreciate the efforts of the Court and the support of our creditors in this process and putting us in a strong position to build on J.C. Penney’s long track record of taking care of our associates, customers, vendor partners and communities.”

Kirkland & Ellis LLP is serving as legal adviser, Lazard is serving as financial adviser, and AlixPartners LLP is serving as restructuring adviser to the Company.

Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal counsel to Brookfield and Simon.