REUTERS: J.C. Penney Co Inc said on Saturday a U.S. Bankruptcy Court will allow it to keep paying wages and benefits to workers who will remain on the job after the U.S. department store chain filed for Chapter 11 protection from creditors, and also to pay vendors for goods delivered to its stores.
J.C. Penney, which filed for Chapter 11 protection on Friday, said it received the "first-day" approvals from the U.S. Bankruptcy Court for the Southern District of Texas that included access to and use of about US$500 million in cash collateral.
The company said it will seek authorization at its second-day hearing to access US$900 million in debtor-in-possession financing that it received from its existing first lien lenders, which includes US$450 million of new funds.
Lazard Ltd is serving as a financial advisor of J.C. Penney, Kirkland & Ellis LLP is serving as legal advisor and AlixPartners LLP is serving as restructuring advisor to the company.
J.C. Penney was the latest among traditional brick-and-mortar retailers to crumble as prolonged store closures due to the COVID-19 pandemic delivered the final blow to troubled businesses.
(Reporting by Sabahatjahan Contractor in Bengaluru; Editing by David Gregorio)