J.C. Penney Co. Inc. is on a tricky but resolute path to rebirth, its attorneys told a bankruptcy court in Texas.
J.C. Penney Co. Inc. is on a tricky but resolute path to rebirth, its attorneys told a bankruptcy court in Texas, at an unusual hearing that took place on Saturday.
The restructuring agreement also envisions the possibility of a sale, for which there is “robust interest” from third parties, said Sussberg, though he didn’t name any potential buyers. “That restructuring support agreement provides the foundation for our path forward, and the hopeful going concern of J.C. Penney,” he said at the hearing.
J.C. Penney’s financial struggles were documented before the coronavirus pandemic, with the company facing down competition not only from other traditional retailers including Kohl’s, Macy’s, Walmart, Target and fast fashion counterparts, but also newer contenders like Amazon. At Saturday’s hearing, Sussberg said that the company is “in constant communication” with the stock exchange and the U.S. Securities and Exchange Commission, and that it will make an announcement when it learns whether it will be de-listed.
“That revolver draw, which we have been using to fund operations, is resulting in an excessive cash burn, and the company simply cannot afford to live without a formal restructuring,” he said.
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