J.C. Penney

J.C. Penney, shown May 18, 2020, at The Galleria in Richland Township.

J.C. Penney, a longtime anchor of The Galleria in Richland Township, remains closed with no indication of when or if it would reopen in the wake of the COVID-19 shutdown.

Retail stores with outdoor entrances at malls were given permission by Gov. Tom Wolf to reopen last week.

But while dozens of cars were parked outside Boscov’s at The Galleria on Monday, the “temporarily closed” sign remains posted on J.C. Penney’s door. 

With financial difficulty made worse by the pandemic, J.C. Penney’s headquarters in Texas was approved for voluntary Chapter 11 bankruptcy on Friday. That will come with some store closures, the company said. 

“Stores will close in phases throughout the Chapter 11 process – and the first phase of closures, including specific store details and timing, will be disclosed in the coming weeks,” a J.C. Penney statement read. 

J.C. Penney entered into a restructuring support agreement with lenders holding approximately 70% of the company’s first lien debt to reduce the company’s outstanding indebtedness and strengthen its financial position, according to a press release on the company’s website.

A statement attributed to Jill Soltau, chief executive officer of J.C. Penney, read: “By entering this restructuring support agreement with our lenders, we expect to reduce several billion dollars of indebtedness, provide increased financial flexibility to help navigate through the Coronavirus (COVID-19) pandemic, and better position J.C. Penney for the long term.”

Soltau said the approval of bankruptcy motions from the U.S. Bankruptcy Court for the Southern District of Texas will enable the company to continue implementing its plan for renewal.

J.C. Penney has approximately $500 million in cash on hand as of the Chapter 11 filing date, and the company is seeking further authorization to access the $900 million in debtor-in-possession financing to use during the bankruptcy process.

The court has authorized J.C. Penney to continue paying nonfurloughed associate wages, provide certain benefits to all associates, and to pay vendor partners in the ordinary course for all goods and services provided on or after the Chapter 11 filing date.

To restructure its own debt accrued over the years, The Galleria went into foreclosure in February. The property was turned over to its lenders, and Zamias Services Inc. handed property management of The Galleria to a receiver, Spinoso Real Estate Group of Syracuse, New York.

Spinoso’s general responsibility as a receiver is to stabilize the mall with the aim of selling it to a new owner.  

Spinoso Chief Operating Officer Don Klaben did not return requests for comment Monday about how J.C. Penney’s bankruptcy and plan to close some stores could affect The Galleria.  

 Russ O’Reilly is a reporter for The Tribune-Democrat. He can be reached at 270-4449. Follow him on Twitter @RussellOReilly.

Russ O'Reilly is a reporter for The Tribune-Democrat. Follow him on Twitter @RussellOReilly.

 

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