U.S. Bankruptcy Judge David Jones approved the JCPenney’s requests to continue paying workers and vendors delivering merchandise to stores during a hearing following the retailer’s bankruptcy filing in a federal court in Texas, according to a report from Fox News.
JCPenney envisions handing control to lenders and reducing a significant portion of its nearly $5 billion of debt after reorganizing into two companies.
One would be a company operating its business, while the other would be a real estate investment trust holding some of the company’s property, according to a report from Reuters.
The company reached agreement before its Chapter 11 filing for $450 million of fresh financing from existing lenders. Another $450 million of current debt is to be “rolled up” and given the same legal status as that funding.
JCPenney is also considering selling the company, should it be unable to emerge from bankruptcy.
It is believed to be already in talks with potential buyers.
