A significant transaction involving the sale of 117 JCPenney stores, valued at $947 million, is at risk of falling through. The deal, which was announced in July, involved Onyx Partners, Ltd., a private equity firm based in Boston, acquiring over 100 properties from the Copper Property CTL Pass Through Trust. This trust was established by JCPenney’s lenders following the retailer’s bankruptcy in 2020.
According to a regulatory filing submitted on December 22, 2023, the trust indicated that the sale “did not close” by the scheduled deadline. Consequently, it issued a termination notice to Onyx, stating that the agreement would be voided if the private equity firm does not complete the purchase by the end of the week. The initial closing date for the deal was set for early September, but it has faced multiple delays.
Proceeds from this transaction were intended to benefit JCPenney’s creditors, providing crucial financial support following the company’s emergence from Chapter 11 bankruptcy in December 2020. JCPenney currently operates nearly 650 store locations across the United States and has already confirmed the closure of seven stores earlier this year.
The JCPenney locations included in the proposed sale span 35 states and Puerto Rico, with a notable concentration of 19 stores each in both Texas and California. The retailer previously assured that all stores involved in the deal would remain operational following the sale.
As the deadline approaches, uncertainty looms over the fate of these stores. It remains unclear whether the failed transaction will impact their operations. The situation underscores the challenges JCPenney faces in stabilizing its business in a competitive retail environment. While JCPenney seeks to navigate these financial hurdles, the outcome of the Onyx Partners deal could significantly affect the company’s future and its ability to meet creditor obligations.
