JC Penney is on its way out of bankruptcy

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JC Penney filed for Chapter 11 bankruptcy in May, becoming one of the largest retailers to do so during the pandemic.

NEW YORK – Editor’s Note: The video above is from May 2020.

JC Penney is set to emerge from bankruptcy by Thanksgiving, after a US bankruptcy court approved the sale of the ailing 118-year-old retailer to its two largest owners and major lenders.

The U.S. Bankruptcy Court for the Southern District of Texas has approved a purchase agreement, announced earlier this fall, under which substantially all of JC Penney’s retail and operating assets will be acquired by Brookfield Asset Management Inc. .and Simon Property Group through a combination of cash and new term loan debt. The approval follows a lengthy court hearing on Monday.

Still, the retailer faces an uphill battle to attract shoppers this holiday season as they stay away from malls and stores for safety reasons and shop more online. Meanwhile, Amazon and big discounters like Walmart and Target are only going from strength to strength as they offer low prices and one-stop shopping.

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JC Penney filed for Chapter 11 bankruptcy in May, becoming one of the largest retailers to do so during the pandemic amid a wave of store closures forced by the spread of COVID infections -19 in the United States.

More than two dozen retailers have filed for bankruptcy since the pandemic temporarily shuttered stores, restaurants, gyms and other businesses across the country. Retailers are worried about the effects on their business with a surge of new cases across the country.

The Plano, Texas chain will cut nearly a third of its stores over the next two years as it restructures, leaving just 600 locations open.

With no other worthy offers in sight, Penney’s fate hung by the wire. Its financing agreement expires on November 16 and the sale had to be completed on November 20 to avoid bankruptcy for the company.

“Our goal from the beginning of this process has been to ensure that JC Penney will continue to serve its customers for decades to come and this court approval achieves that goal,” Jill Soltau, CEO of JC Penney, said in a statement.

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