The move will avert a liquidation that would have put the department store chain out of business and jeopardised tens of thousands of jobs.

The process will give the mall operator a chance to continue functioning while reorganising its finances and business.

The American retailer reported sales of $1.39 billion in the period ended August 1, down from $2.51 billion a year earlier.

The group argues a liquidation would generate more than $8.4 billion, enough to pay off all creditors with some left over for shareholders.