J.C. Penney’s (JCP) future truly hangs in the balance.
A source familiar with the situation tells Yahoo Finance all options remain on the table for the overly indebted retailer, including a full liquidation as a means to better satisfy creditors. The source says J.C. Penney continues to evaluate all options after a debtor-in-possession loan — known as DIP funding — of around $450 million fell through last weekend.
A view of a JC Penney during the coronavirus pandemic on May 12, 2020 in Queens borough of New York City. COVID-19 has spread to most countries around the world, claiming over 270,000 lives with over 3.9 million infections reported. (CNBC)JC Penney in talks for $450 million loan as it eyes Friday bankruptcy filing. (Photo by John Nacion/NurPhoto via Getty Images)
Lenders may be balking on providing J.C. Penney funding to keep its business open during a run through bankruptcy and ultimate resurrection, given years of losses and a dim outlook for the department store industry.
A spokesperson declined to comment on whether J.C. Penney is looking at a liquidation.
Up to this point, reports have had J.C. Penney filing for bankruptcy and closing up to 200 stores. The chain would emerge with more than 600 stores open and far less debt.
Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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