U.S. mall owners Simon Property Group and Brookfield Property Partners are close to finalizing an $800-million deal to rescue the embattled department store chain JC Penney from bankruptcy, avoiding a total liquidation and saving about 70,000 jobs and 650 stores, Joshua Sussberg of the law firm Kirkland & Ellis said Wednesday. Simon and Brookfield will pay roughly $300 million in cash and assume $500 million in debt, Sussberg said during a court hearing.
Wells Fargo has also agreed to give Penney $2 billion in revolving credit once the transaction is completed, leaving the retailer with $1 billion in cash, Sussberg said. Penney plans to seek approval from the bankruptcy judge for this rescue deal early next month.
Dozens of other retailers, including the department store chains Neiman Marcus, Stage Stores and Lord & Taylor, have filed for bankruptcy protection during the Covid-19 crisis. Some retailers have not found buyers to rescue them. Lord & Taylor, the oldest department store operator in the United States, and the home goods chain Pier 1 Imports are in the process of liquidating.