Mall owners close to deal to buy JC Penney out of bankruptcy

Two of the country’s largest mall owners are close to a deal to buy J.C. Penney out of bankruptcy and keep the chain of department stores running.

“We are all committed to moving this quickly and saving J.C. Penney,” J.C. Penney’s lawyer Josh Sussberg said during a court hearing.

The agreement with Simon Property Group and Brookfield Property Partners would save about 70,000 jobs and avoid liquidation for the retailer.

The 118-year-old department store filed for Chapter 11 bankruptcy protection in mid-May. As part of its bankruptcy reorganization, the company said it planned to close nearly a third of its 846 locations in the next two years.

Mall owners are facing challenges as stores close or are unable to pay rent. The closing of large anchor tenants can also trigger contract clauses allowing other tenants to break their leases or pay lower rent.

Last month, Simon and Authentic Brands Group entered a $325 million deal to buy clothier Brooks Brothers.

The Associated Press contributed to this report.

Cox Media Group