By Max Bowenemail@example.com
One of the anchor businesses at the Emerald Square Mall has filed for Chapter 11 as a means of reducing several billions in outstanding debt.
According to a press release, the filing took place on May 15 in the U.S. Bankruptcy Court for the Southern District of Texas, and the company has drafted a restructuring support agreement [RSA] with lenders holding approximately 70 percent of its first lien debt. The plan does include the reduction of the company’s “store footprint to better align its business with the current operating environment.”
JCPenney will file a number of motions with the U.S. Bankruptcy Court seeking authorization to support its operations during the financial restructuring process, the statement read. This includes authority to pay non-furloughed associate wages, provide certain benefits to all associates, and to pay vendor partners for all goods and services provided on or after the Chapter 11 filing date.
In the statement, Jill Soltau, chief executive officer of JCPenney, said that prior to the pandemic the company had made progress in a rebuilding process under its Plan for Renewal. In mid-March, retail businesses across the country were forced to close their doors, including the Emerald Square Mall. A four-phase plan to re-open the state’s businesses is tentatively planned to begin on Tuesday, May 19.
“The Coronavirus (COVID-19) pandemic has created unprecedented challenges for our families, our loved ones, our communities, and our country,” said Soltau. “As a result, the American retail industry has experienced a profoundly different new reality, requiring JCPenney to make difficult decisions in running our business to protect the safety of our associates and customers and the future of our company.”
As re-openings across the country continue, JCPenney is allowing customers into select stores and continuing to offer contact-free curbside pickup service. The company’s eCommerce distribution centers are also filling online orders and customer care centers are operational.
“The health and safety of associates, customers, and communities remains a top priority, and the Company is gradually reopening stores and offices in a phased approach while following guidance from local and state orders,” said Soltau.