U.S. Bankruptcy Court allows J.C. Penney to keep paying staff and vendors

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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 $500 million in cash collateral.

The company said it will seek authorization at its second-day hearing to access $900 million in debtor-in-possession financing that it received from its existing first lien lenders, which includes $450 million of new funds.

Lazard Ltd (N:LAZ) 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.

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