How could JCPenney be rescued from bankruptcy?

The pandemic, due to the closures it caused and the social distance that is necessary to avoid infection, has caused the sales of many retailers to drop abruptly, leading many companies to file for bankruptcy. Who wants to rescue J.C. Penny from this?  

Simon Property Group and Brookfield Property, owners of large shopping centers in the United States, are about to close an $ 800 million agreement to rescue JCPenney from bankruptcy, thus avoiding a total liquidation and saving about 70,000 jobs in 650 branches of the brand, Joshua Sussberg of the law firm Kirkland & Ellis said Wednesday.

According to CNBC, companies Simon and Brookfield will pay $ 300 million in cash and assume a debt of $ 500 million. Once the transaction is complete, Wells Fargo also agreed to grant JCPenney $ 2 billion of credit leaving the retailer with $ 1 billion in cash.

The company is seeking approval from the bankruptcy judge for this bailout deal that could come early next month.

Hedge funds and private equity firms have funded JCPenney's bankruptcy and are poised to take ownership of some stores and the retailer's distribution centers in exchange for forgiving part of the department chain's $ 5 billion debt.

The JCPenney chain of stores was hit by the coronavirus pandemic, at the same time that it had excess debt for which it filed for Chapter 11 bankruptcy protection during the month of May.

CNBC reported in May that Simon planned to spend $ 5 billion to save retailers that have been hurt by the pandemic. The company, which owns the shopping centers, also struck a deal to save the Brooks Brothers chain, Lucky Brand, from bankruptcy and partnered with ABG and Brookfield to save the Forever 21 chain.

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