JC Penney hits ‘stalemate’ with potential buyers. Lenders to make bid for department store in bankruptcy

Talks had been progressing with three potential bidders to salvage the department store chain J.C. Penney, and possibly keep hundreds of stores open for business. 

But those discussions have since hit a “stalemate,” and time is running out to keep the company alive, according to the department store chain’s attorney. 

Penney’s lenders are now set to make a credit bid to own the retailer as a standalone company, attorney Joshua Sussberg of Kirkland & Ellis said during a Monday bankruptcy court hearing. He said the transaction should be completed within 30 days. 

“Our lenders are no longer going to be held hostage in negotiations with third parties,” Sussberg said. “While it is possible that one of the bidders comes back into the transaction, we can no longer stand idly by and allow for negotiating postures to stand in the way of 70,000 jobs and our vendor base.” 

He added that Penney is set to close a number of additional stores, as talks with bidders have fallen through. 

“Several locations that were on our original closing list but were removed … because of negotiations … will be closed promptly,” Sussberg said. 

Penney filed for Chapter 11 bankruptcy protection on May 15, weighed down by debt and battered by the coronavirus pandemic. 

This story is developing. Please check back for updates.