Well_Off, I hear you, but greatly improved earnings with all this increased debt is imperative. If they have two more bad or lack luster earnings, they will be toast. You can't keep on incurring new debt with revenue flat, dropping, or improving only marginally.
Soros doesn't really have a track record with regard to equities, he is more of a macro economic investor.
The debt is good news in a sense assuming (as is almost certainly the case) that it is in addition to the revolving line of credit. They effectively have enough cash to survive the next five years and probably beyond that assuming they can stop burning cash during that time frame. Surely someone can accomplish that but it isn't a sure thing. The capital structure of JCP is more or less as follows:
Revolving line of credit - This is secured by inventory, receivables and other very secure assets.
New debt - Don't really know much of anything about this but it is supposedly secured by the real estate and second position on inventory.
Other debt - These are the people who are kind of "wetting themselves" at this point in time as they just went from having security in the real estate to now providing the risk capital. These are the people who are "wetting themselves" right now as they had been somewhat secure but not anymore..
Equity holders - Obviously at risk but they were at risk a month ago so nothing has changed aside from the fact that the length of the option just lengthened because JCP is unlikely to go bust in the next year or two now. Longer term, who knows what happens.