Terms Set For J.C. Penney Bankruptcy Emergence

J.C. Penney has filed a draft asset purchase agreement that tracks the terms of the previously announced letter of intent to sell the company.

Under those terms, Brookfield Asset Management and Simon Property Group will acquire substantially all of J.C. Penney’s retail and operating assets through a combination of cash and new term loan debt. The agreement will establish separate property holding companies, comprising 160 of J.C. Penney’s real estate assets and all of its owned distribution centers.

The parties expect a hearing to seek court transaction approval to take place in November. If they achieve court approval and can meet closing conditions in the asset purchase agreement, they expect that the sale will close in advance of the December 2020 holiday season. J.C. Penney operating assets will then conduct business outside of the Chapter 11 process under the J.C. Penney banner with Simon and Brookfield as its owners.

“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,” stated Jill Soltau, J.C. Penney CEO.