JCPenney entered into an asset purchase agreement with Brookfield Asset Management, Simon Property Group and a majority of the company’s DIP and first lien lenders.

“Signing a definitive APA with Brookfield, Simon and our majority first lien lenders allows us to move forward towards the completion of our financial restructuring – and we are looking forward to operating under new ownership outside Chapter 11 in advance of the 2020 holiday season,” Jill Soltau, CEO of JCPenney, said. “This transaction is a testament to the thousands of dedicated employees who have been working incredibly hard over the last several months under difficult circumstances. Our customers are at the heart of JCPenney and we look forward to serving them under the JCPenney banner for decades to come. Our team remains laser-focused on implementing our plan for renewal to offer compelling merchandise, drive traffic, deliver an engaging experience, fuel growth and build a results-minded culture.”

Key terms of the APA are as follows:

• Brookfield and Simon will acquire substantially all of JCPenney’s retail and operating assets (OpCo) through a combination of cash and new term loan debt
• The formation of separate property holding companies (PropCos), comprising 160 of the company’s real estate assets and all of its owned distribution centers, which will be owned by the company’s DIP and first lien lenders
• The OpCo and PropCos will enter into master leases with respect to the properties and distribution centers moved into the PropCos. JCPenney, Simon, Brookfield and the majority lender group have reached an agreement on all outstanding business points in the master lease agreement.

Kirkland & Ellis is serving as legal adviser, Lazard is serving as financial adviser and AlixPartners is serving as restructuring adviser to JCPenney.

Paul, Weiss, Rifkind, Wharton & Garrison is serving as legal counsel to Brookfield and Simon.