After years of financial struggle and rumors, retailer JCPenney Co. finally entered into Chapter 11 bankruptcy protection on Friday.
The Plano-based retailer secured $900M in debtor-in-possession financing and filed its bankruptcy reorganization petition with the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi.
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As part of its restructuring plan, the 108-year-old retailer inked a restructuring support agreement with lenders who hold about 70% of Penney’s first-lien debt to enhance the company’s finances and reduce its debt overhang.
The agreement signed is expected to slash several billion dollars' worth of indebtedness while providing liquidity to the firm as it deals with falling retail traffic and the coronavirus crisis, Penney's said in its announcement.
“We look forward to emerging from both Chapter 11 and this pandemic as a stronger retailer, continuing to implement our plan for renewal, and building capabilities focused on satisfying customers’ wants and needs,” JCPenney CEO Jill Soltau said in a statement.
Before the filing was announced, Penney’s grabbed headlines Friday for reportedly paying four executives millions of dollars in bonuses to retain them, the Observer reported.
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