J.C. Penney’s lenders are preparing to take control of the struggling retailer after discussions with its bidders have hit a dead end, Bloomberg News reported.
J.C. Penney filed for bankruptcy May 15 and has since been in talks with large mall and retail operators, including Simon Property Group and Brookfield Property Partners. But those discussions have reached a stalemate, according to Bloomberg.
If the lenders take control of the retailer it will likely lead to liquidation of its assets.
The company is looking to negotiate a debt-for-equity swap with its lenders in the next 10 days and is also still seeking new bidders, Bloomberg reported.
The lender group initially sought control of J.C. Penney’s real estate and then to sell its retail business.
After it filed for bankruptcy in May, J.C. Penney’s advisers said it had high interest from bidders. The company plans to close nearly a third of its 846 stores over the next two years as part of its bankruptcy restructuring. It will also lay off all of its employees in its Kings Plaza and Manhattan Mall locations. [Bloomberg] — Keith Larsen