J.C. Penney has finally filed for bankruptcy.
The company formally filed for chapter 11 bankruptcy protection on Friday, becoming the third major U.S. retailer to fall victim to the coronavirus pandemic and ongoing economic shutdown.
The bankruptcy filing, which was announced after the market close, ends a tumultuous two months for the retailer, which was already struggling under more than $3.8 billion in debt when it shuttered its portfolio of 850 stores and head office in mid-March.
The retail chain skipped two debt payments in the last month, though on Thursday it said it made a $17 million interest payment on a loan, avoiding default. Earlier this week the company was reportedly locking in $450 million in financing to navigate chapter 11.
“While we had been working in parallel on options to strengthen our balance sheet and extend our financial runway, the closure of our stores due to the pandemic necessitated a more fulsome review to include the elimination of outstanding debt,” said Jill Soltau, chief executive officer of JCPenney.
Jim Cramer weighs in on the bankruptcy and what it means for the company.
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