Sun. Jun 16th, 2024


J.C. Penney is mediating with a group of first-lien lenders and landlords Simon Property Group and Brookfield Property, to push forward their negotiations for a planned sale that would keep the retailer in business. 

The mediation is taking place before U.S. Bankruptcy Judge Marvin Isgur in Texas, after the parties agreed to the process to try to resolve issues, according to a source familiar with the matter. 

The timeframe of the mediation process is unclear, though the timelines in the case approved last week by U.S. Bankruptcy Judge David Jones, who is presiding over the bankruptcy process, still remain in place. Under that timeframe, the asset purchase agreement and sale motion are due Friday, and the court is tentatively scheduled to hold a hearing next week to review the terms of the agreement. 

The holiday season also imposes an overarching time pressure. In court filings in September, J.C. Penney wrote that it has to complete its restructuring transactions before the 2020 holiday season. At the same time, it may also need to wait until early November for certain European Union regulatory approvals to come through for the portion of the sale involving Simon and Brookfield, it has said. 

At a hearing last week, Andrew Leblanc of Milbank LLP, an attorney for the first-lien lenders involved in the sale, told the court that the parties were trying to resolve such issues. 

“There are a number of issues that have to be resolved in the case generally, and I will tell the court that everybody working on this to try to get the deal done…is working really around the clock,” Leblanc told the court last week.

“What I can tell the court is that we are committed to working as hard as we can to try to get these issues done,” he said. “And I know that all of the other parties are committed to doing the same.”  

Representatives for J.C. Penney, the lenders, Simon and Brookfield, declined to comment. 

J.C. Penney has indicated in its filings that it expects the requisite EU approval to come through by Nov. 6. In the meantime, the court has scheduled a sale hearing on Nov. 2, and Chapter 11 organization plan hearings on Nov. 24 and Nov. 25.  

Chapter 11 plans essentially lay out every class of creditor involved, and detail the sort of recoveries that the various stakeholders would receive under the plan. 


By admin