Item 7.01. Regulation FD.
As previously reported, on May 15, 2020, J. C. Penney Company, Inc. ("J. C.
Penney" or the "Company") and certain of its subsidiaries (together with the
Company, the "Debtors") commenced voluntary cases under chapter 11 of title 11
of the United States Code (the "Chapter 11 Cases") in the United States
Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court").
Prior to the commencement of the Chapter 11 Cases, on May 15, 2020, the Company
and its subsidiaries (together with the Company, the "Company Parties") entered
into a Restructuring Support Agreement with members of an ad hoc group of
lenders and noteholders (the "Ad Hoc Group").
Also as previously reported, on October 28, 2020, the Company, together with
certain of its subsidiaries, entered into an Asset Purchase Agreement (the
"Asset Purchase Agreement") with Copper Retail JV LLC, an entity formed by and
under the control of Simon Property Group and Brookfield Property Group, and
Copper Bidco LLC, an entity that is controlled by the lenders under the
Superpriority Senior Secured Debtor-In-Possession Credit and Guaranty Agreement
and the other holders of the Debtors' first lien debt.
To facilitate discussions with the Ad Hoc Group during negotiations relating to
the Asset Purchase Agreement, and in connection with discussions with certain
other lenders, noteholders and other creditors, the Company provided such
persons with certain non-public information subject to confidentiality
agreements (collectively, the "NDAs"). Pursuant to the NDAs, the Company agreed
to publicly disclose certain information (the "Cleansing Material") upon the
occurrence of certain events set forth in the NDAs. A copy of the Cleansing
Material is attached to this Current Report on Form 8-K as Exhibit 99.1.
The Cleansing Material was not prepared with a view toward public disclosure and
should not be relied upon to make an investment decision with respect to J. C.
Penney. The Cleansing Material should not be regarded as an indication that the
Company Parties or any third party consider the Cleansing Material to be a
reliable prediction of future events, and the Cleansing Material should not be
relied upon as such. The Cleansing Material includes certain values for
illustrative purposes only and such values are not the result of, and do not
represent, actual valuations, estimates, forecasts or projections of the Company
Parties or any third party and should not be relied upon as such. Neither the
Company Parties nor any third party has made or makes any representation to any
person regarding the accuracy of any Cleansing Material or undertakes any
obligation to publicly update the Cleansing Material to reflect circumstances
existing after the date when the Cleansing Material was prepared or conveyed or
to reflect the occurrence of future events, even in the event that any or all of
the assumptions underlying the Cleansing Material are shown to be in error.
The information disclosed in this Item 7.01, including Exhibit 99.1, is being
furnished and shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
subject to the liabilities of that Section, nor shall it be deemed incorporated
by reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act, regardless of any general incorporation language in such a filing.
Additional Information on the Chapter 11 Cases
Court filings and information about the Chapter 11 Cases can be found at a
website maintained by the Debtors' claim agent, Prime Clerk, at
http://www.cases.primeclerk.com/JCPenney.
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Cautionary Statement Regarding Forward-Looking Information
The Company has included statements in this Current
Report on Form 8-K that may constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Words such as
"expect" and similar expressions identify forward-looking statements.
Forward-looking statements are based only on the Company's current assumptions
and views of future events and financial performance. They are subject to known
and unknown risks and uncertainties, many of which are outside of the Company's
control that may cause the Company's actual results to be materially different
from planned or expected results. Those risks and uncertainties include, but are
not limited to, risks attendant to the bankruptcy process, including the
Company's ability to obtain court approval from the Bankruptcy Court with
respect to motions or other requests made to the Bankruptcy Court throughout the
course of the Chapter 11 Cases; the ability of the Company to negotiate,
develop, confirm and consummate a plan of reorganization; the effects of the
Chapter 11 Cases, including increased legal and other professional costs
necessary to execute the Company's reorganization, on the Company's liquidity
(including the availability of operating capital during the pendency of the
Chapter 11 Cases), results of operations or business prospects; the effects of
the Chapter 11 Cases on the interests of various constituents; the length of
time that the Company will operate under Chapter 11 protection; risks associated
with third-party motions in the Chapter 11 Cases; Bankruptcy Court rulings in
the Chapter 11 Cases and the outcome of the Chapter 11 Cases in general;
conditions to which any debtor-in-possession financing is subject and the risk
that these conditions may not be satisfied for various reasons, including for
reasons outside the Company's control; the ability of the parties to the Asset
Purchase Agreement to consummate the transactions contemplated therein; general
economic conditions, including inflation, recession, unemployment levels,
consumer confidence and spending patterns, credit availability and debt levels;
changes in store traffic trends; the cost of goods; more stringent or costly
payment terms and/or the decision by a significant number of vendors not to sell
the Company merchandise on a timely basis or at all; trade restrictions; the
ability to monetize non-core assets on acceptable terms; the ability to
implement the Company's strategic plan, including its omnichannel initiatives;
customer acceptance of the Company's strategies; the Company's ability to
attract, motivate and retain key executives and other associates; the impact of
cost reduction initiatives; the Company's ability to generate or maintain
liquidity; implementation of new systems and platforms; changes in tariff,
freight and shipping rates; changes in the cost of fuel and other energy and
transportation costs; disruptions and congestion at ports through which the
Company imports goods; increases in wage and benefit costs; competition and
retail industry consolidations; interest rate fluctuations; dollar and other
currency valuations; the impact of weather conditions; risks associated with
war, an act of terrorism or pandemic; the ability of the federal government to
fund and conduct its operations; a systems failure and/or security breach that
results in the theft, transfer or unauthorized disclosure of customer, employee
or Company information; legal and regulatory proceedings; the Company's ability
to access the debt or equity markets on favorable terms or at all; risks arising
from the delisting of the Company's common stock from the New York Stock
Exchange; and the impact of natural disasters, public health crises or other
catastrophic events on the Company's financial results, in particular as the
Company manages its business through the COVID-19 pandemic and the resulting
restrictions and uncertainties in the general economic and business environment.
Please refer to the Company's Annual Report on Form 10-K for the year ended
February 1, 2020, and Quarterly Reports on Form 10-Q filed subsequently thereto,
for a further discussion of risks and uncertainties. There can be no assurances
that the Company will achieve expected results, and actual results may be
materially less than expectations. Investors should take such risks into account
and should not rely on forward-looking statements when making investment
decisions. Any forward-looking statement made by the Company in this Current
Report on Form 8-K is based only on information currently available to it and
speaks only as of the date on which such statement is made. The Company does not
undertake to update these forward-looking statements as of any future date
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibit 99.1 Cleansing Material
Exhibit 104 Cover Page Interactive Data File - the cover page XBRL tags are
embedded within the Inline XBRL document
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