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JCPenney Receives Bankruptcy Court Approval For 'First Day' Motions

J. C. Penney Company Inc. (JCP), which filed for Chapter 11 protection on Friday, said Saturday that it received the "first-day" approvals from the U.S. Bankruptcy Court for the Southern District of Texas that included access and use its about $500 million in cash collateral.

J.C. Penney said that the court has authorized the company to continue paying non-furloughed associate wages, provide certain benefits to all associates, and also to pay vendors for goods delivered to its stores.

The troubled retailer noted that it will seek authorization at its second day hearing to access the $900 million in debtor-in-possession financing that it received from its existing first lien lenders, which includes $450 million of new money.

As part of its bankruptcy, the company would reduce its store footprint to better align its business with the current operating environment. Stores will close in phases throughout the Chapter 11 process, JCPenney said. The company will disclose the first phase of closures, which include specific store details and timing, in the coming weeks.

Neiman Marcus Group Inc., J.Crew Group Inc. and Stage Stores Inc. filed for bankruptcy this month.

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