What are Corts? They are not preferred stock or trust preferred securities, but they are comparable.
They are $25 face value, exchange-listed instruments that pay interest at a fixed rate.
The Corts (corporate-backed trust securities) are issued by a trust containing J.C. Penney bonds.
The trust was by underwriters, in this case Salomon Smith Barney, with PaineWebber as co-manager.
The underwriters bought a $100,000,000 block of J.C. Penney bonds with a 7 5/8% coupon
maturing in 2097 in the secondary market (the bonds were issued in 1997) and put them in a trust.
Then the trust issued 4,000,000 shares at $25 apiece.
It's essentially a re-denomination of the bonds to give them a face value of $25 instead of $1,000.
This type of security is sometimes called a pass-through.
The payments on the bonds pass directly through the trust to the investor.
Each shareholder collects his or her portion of the income payments on the bonds semiannually.
Link to JCPenney docket as found on Prime Clerk