WHITE MARSH, MD—J.C. Penney filed for bankruptcy on Friday, as was predicted earlier this week.
In a news release, the company announced that it had has entered into a restructuring support agreement (RSA) with lenders holding approximately 70% of J.C. Penney’s first lien debt to reduce the company’s outstanding indebtedness and strengthen its financial position.
The RSA contemplates agreed-upon terms for a pre-arranged financial restructuring plan that is expected to reduce several billion dollars of indebtedness, provide increased financial flexibility to help navigate through the Coronavirus (COVID-19) pandemic, and better position J.C. Penney for the long-term.
To implement the plan, the company filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, in Corpus Christi, TX.
The company plans to close an unspecified number of stores permanently in a bid to survive bankruptcy. J.C. Penney had 845 stores at the end of 2019, according to real estate data source CoStar Portfolio Strategy, including a location at White Marsh Mall.
The 118-year-old department store chain has struggled with a nearly $4-billion debt load and competition from e-commerce firms and discount brick-and-mortar retailers even before the coronavirus pandemic hit the U.S.