By Lauren Hirsch and Sapna Maheshwari | The New York Times
J.C. Penney reached an agreement to sell its retail business to the mall operators Simon Property Group and Brookfield Property Partners on Wednesday, averting a total liquidation that would have had significant ripple effects through the industry and cost tens of thousands of jobs.
Simon and Brookfield will pay about $300 million in cash and assume $500 million in debt to buy J.C. Penney, lawyers for the retailer said at a Bankruptcy Court hearing. The deal will split J.C. Penney into separate companies, with Simon and Brookfield running the retail business and its creditors owning a portion of its real estate. In all, the deal values J.C. Penney at $1.75 billion, including the funds committed to support its business after it emerges from bankruptcy.
“We are in a position to do exactly what we set out to do at the very beginning of these cases, and that is to preserve 70,000 jobs, a tenant for landlords, a vendor partner and a company that has been around for more than a century,” Joshua Sussberg, a lawyer at Kirkland & Ellis, which has been representing J.C. Penney, said at the hearing.