Bankrupted JC Penney plans to spin its properties into separate real estate company

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A piece of J.C. Penney's proposal to emerge from bankruptcy includes spinning its real estate into a publicly traded real estate investment trust.

"JC Penney now finds itself facing another monumental challenge to its business: emerging from the disruption caused by the novel Coronavirus pandemic," CFO Bill Wafford said in his court declaration.

Because of the Covid-19 crisis, Penney's year-over-year net sales tanked by roughly 88%, and bricks-and-mortar sales dropped to almost $0, Wafford said. Penney's unencumbered real estate is valued at $1.4 billion when the lights are on, and $704 million when they're shut, Kirkland & Ellis attorney Joshua Sussberg said Saturday during a virtual court hearing.

As of the bankruptcy filing, seven Penney stores were operating curbside pickup and 41 were fully open for business again, Sussberg said. All of Penney's shops had been temporarily shut to try to help curb the spread of the Covid-19 virus since March 18. Penney now has until July 15 to strike a business plan and hit certain milestones to receive the full bankruptcy financing package it has struck, or else it must pursue a sale.

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Then bankrupt that one, too. In the reit-ail-pocalypse.

Yeah they could market it as potential office space.

Isn’t that the same strategy that Sears agonizingly used?

mrzackmorris 🤡 for causing many of your followers to lose thousands penny flipping

They are obviously out of all other options - but we saw this story with Sears! And the perception is that it’s already over!

Ummm, yeah, because that's what we need... more outdated real estate.

Hmmm interesting

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