J.C. Penney Co. is negotiating a bankruptcy deal with lenders including KKR & Co., Ares Management Corp. and Sixth Street Partners that would slash the department-store chain’s debt in exchange for control of the company, Bloomberg News reported. The plan would be included in a chapter 11 court filing that could come next week. The lender group, which also includes Apollo Global Management Inc., could provide as much as $500 million to help J.C. Penney stay in business during the bankruptcy process. H/2 Capital Partners is also in talks with the company on terms of the restructuring plan, though it’s been working separately from the lender group. The firm could provide a portion of the bankruptcy loan, also known as a debtor-in-possession financing, but plans haven’t been finalized. J.C. Penney has missed two debt payments in the past month and is expected to seek court protection in the coming days when the grace periods expire. Like other retailers, it saw revenue evaporate when the Covid-19 outbreak forced stores to close.
