Bankruptcy fears compel J.C. Penney to disregard interest debt payment
J.C. Penney Co Inc will skip a $12 Million interest payment on Wednesday, putting the struggling retailer towards a potential default. It was reported that the department store chain was close to filing bankruptcy protection to save money and to evaluate financial alternatives. The Chapter 11 bankruptcy protection could help J.C. Penney recapitalize its nearly $4 billion outstanding debt.
The company was already struggling even before the virus outbreak. The 118-year-old department store chain is already contending with the rising popularity of online shopping.
Recently, J.C. Penney decided to shut all of its 850 department stores and let go of nearly all of its 95,000 employees.
J.C. Penney Co Inc will not pay the $12 Million interest pay due today on its Senior Notes maturing in 2036. It decided to invoke a 30-day grace period which keeps the missed payment considered a default.