J.C. Penney Co. reached a restructuring agreement to transfer its defined benefit pension plan to the Pension Benefit Guaranty Corp. and sell its retail business to mall operators Simon Property Group and Brookfield Property Partners.
The agreement was detailed in a statement on the company's restructuring website and documents filed with the U.S. Bankruptcy Court in Corpus Christi on Tuesday.
The company said it reached agreement with lenders holding 70% of its first-lien debt that will enable it to regroup.
The agreement has not been approved yet by the court.
The restructuring website noted that benefits for the pension plan — with $3.5 billion in assets and $3.2 billion in liabilities at the end of 2019, according to the company’s 10-K filed in January — are guaranteed by the PBGC. The plan "is well-funded and we do not anticipate any change to the benefits provided from the plan as a result of the Chapter 11 filing," according to a letter to plan participants.
PBGC officials declined to comment on the proposed transfer since it is an ongoing plan. In bankruptcy cases like this, the PBGC is an unsecured creditor.