On Page 15 of J.C. Penney Company’s bankruptcy filing Friday late afternoon, there is the signature of the corporation’s general counsel and corporate secretary, Brandy Treadway.
“Attached hereto is a true, complete, and correct copy of the resolutions of the Board of Directors of the Company.”
When corporations file to restructure under Chapter 11 of the U.S. Bankruptcy Code, the general counsel of the company plays a critical role. By having Treadway officially sign the 24-page bankruptcy filing, legal experts say, J.C. Penney was making it clear that Treadway will have a primary role moving forward.
Bankruptcy experts say Treadway already made two major decisions:
Who to select as the legal and financial advisors? Kirkland & Ellis and Jackson Walker as the lawyers; Lazard and Alix Partners as the financial advisors.
Where to file the bankruptcy? The Southern District of Texas, which has implemented procedures during the past four years that benefit the debtors.
While no corporate general counsel is ever fully prepared to lead a major corporation through the turmoil of bankruptcy, those who know Treadway say she has been preparing for this event for a while.
In 2019, Treadway was a finalist for the DFW General Counsel of the Year Award. She lost by one vote to Match.com GC Jared Sine. But as part of the awards process, I interviewed Treadway about her life and her career.
Treadway’s father and uncle are attorneys in East Texas, and she spent a lot of time in their law offices growing up.
Treadway went to college at the University of Virginia, which was founded by one of the nation’s original lawyers. She went to SMU Dedman School of Law and practiced M&A dealmaking and capital markets at Weil, Gotshal & Manges, one of the nation’s elite corporate law firms.
“I’ve always been comfortable with lawyers,” she says. “The law has always been around me. I remember reading books when I was five in my dad’s office. I spent a lot of time there.”
Now, Treadway is the top lawyer at J.C. Penney, which has 850 retail stores, 90,000 workers prior to the COVID-19 crisis and more than $10 billion in annual revenues. She’s spending a lot of time at work these days, too.
“Lots and lots of meetings,” she says. “I’m in meetings all day, and then I do my work at night. We constantly see issues that we have never seen before. Retail is an incredibly dynamic industry.
“Plus, we’ve had a lot of change,” she says.
Indeed, the retail industry itself is experiencing monumental shifts – though Treadway insists the extinction of the big box stores is greatly exaggerated.
“The death of brick-and-mortar stores is oversold,” she says. “Three-fourths of all clothes are still sold in a store. No doubt, retail is changing and we get to help craft solutions.”
J.C. Penney has gone through its own extraordinary personnel turnover.
“One of my first tasks when I came to the legal department here was an 8-K SEC filing announcing that [former CEO] Ron Johnson was joining the company,” she says. “It seems like forever ago.”
“Brandy has done an exceptional job helping to smoothly guide the company through a challenging period of change,” says Sidley Austin partner Yvette Ostolaza, who nominated Treadway for the award.
“For example, Brandy managed her team through executive leadership changes earlier this year, starting with the departure of the company’s CEO,” Ostolaza says. “She worked closely with the corporate secretary and the board of directors to implement a novel corporate governance structure that fit the company’s needs.”
Treadway and J.C. Penney leaders formed the “Office of the CEO,” which consisted of four senior executives. The lead independent director became the non-executive chairman. The company has hired a new CEO and is currently searching for a new CFO.
In September 2018, the company’s internal audit department, which has 31 professionals in Texas, Utah, India and Hong Kong, started reporting to Treadway, too. Government relations and privacy offices also report to her.
“Brandy is perpetually focused on communicating to her team regarding changes to keep them informed about the corporate strategy and engaged in helping the business,” Ostolaza says.
Treadway and Ostolaza worked together at Weil for nearly nine years.
“Weil was an exciting place to be and grow up as a young lawyer,” Treadway says. “I was leading deals as a second-year lawyer. It was great training.”
Treadway spent three years practicing corporate law with Weil in London and then moved back to the firm’s Dallas office in February 2008, just as the U.S. economy was going south.
Some of the M&A deals she was working on turned into corporate restructurings, which “was an eye-opener for me,” she says.
For example, Treadway worked for several months on the bankruptcy of SemGroup, an Oklahoma-based oil and gas midstream company which had been the 18th largest privately held company in the U.S. only a year before.
In May 2011, she accepted the offer to join the corporate in-house legal team at J.C. Penney as a securities lawyer.
“I liked working for the same client over and over and getting into the weeds on their issues,” she says.
Only weeks after taking the job at J.C. Penney, Treadway played a key role in the company’s $267.5 million acquisition of Liz Claiborne Brands, which was announced in Oct. 2011.
In 2014, J.C. Penney promoted Treadway to associate GC over legal operations and gave her additional responsibilities for supporting marketing, merchandise, IT, product development and sourcing, store operations and intellectual property.
“Being in-house, you are a partner in the business with your client,” she says. You must have a much better understanding of process. You have to get granular and understand the application of the law on the business, the shareholders and the customers.
Treadway says she prefers to give her business clients “a spectrum of options and the risk associated with each option” and then allow the executives decide which option to pursue.
In 2017, J.C. Penney promoted Treadway to general counsel, leading a corporate legal department that included 26 lawyers and 10 paralegals.
In an interview in August with Law360, Treadway says that her workday starts by rolling over in bed in “looking at sales reports,” which the company sends to her phone each morning. Then, she focuses on getting her kids up and off to school.
Treadway is a major proponent of diversity in the legal profession and public service. She is the fourth consecutive woman to be the general counsel at J.C. Penney. Three-fourths of the lawyers and support staff working for her are women or ethnic minorities.
As general counsel, she encourages her team to be involved in community service efforts. Her mother was a school teacher who taught children with dyslexia.
“I come from a family that believes in giving back,” she says.