NORTH ATTLEBORO — With the holiday shopping season on the horizon, the sale of bankrupt J.C. Penney to its landlords, including the owner of the area’s largest shopping mall, has stalled, according to reports.
Talks between Penney’s lenders and Simon Property Group Inc. — the owners of Emerald Square mall, where a Penney’s was among the original anchor stores — and Brookfield Property Partners LP broke down in recent days, according to Bloomberg News, quoting people with knowledge of the negotiations.
The landlords missed several deal deadlines as communication between the parties lapsed, the sources added.
The two sides may now turn to mediation, Bloomberg said. Representatives of the parties involved would not comment.
In a regulatory filing on Wednesday, however, the retailer wrote that it is still “in discussions regarding the transactions contemplated by the [letter of intent]” between the company, a group of majority first-lien lenders as well as Simon and Brookfield, Women’s Wear Daily reported.
The retailer’s update marks the latest in a series of apparent delays in the case, and especially since the parties filed the Sept. 10 letter of intent, a non-binding document outlining a potential sale deal as part of J.C. Penney’s bankruptcy restructuring process to sustain the company as a going concern.
The retailers was due to file a number of documents by Friday, including a sale motion, an asset purchase agreement, a disclosure statement and a Chapter 11 plan.
Penney’s has announced it is closing 144 of its stores around the country. The Emerald Square location was not on the most recent list in court filings.
Last month, lawyers for Penney’s announced the tentative pact during a brief hearing in U.S. Bankruptcy Court in Dallas. The deal would have saved roughly 70,000 jobs and avoided liquidation for Penney.
The 118-year-old department store, based in Plano, Texas, filed for Chapter 11 bankruptcy protection in mid-May, one of the biggest retailers to do so since the pandemic temporarily shut down nonessential stores around the country.
As part of its bankruptcy reorganization, Penney said it planned to permanently close nearly a third of its 846 stores in the next two years. That would leave it with just over 600 locations.
More than 40 retailers nationwide have filed for Chapter 11 bankruptcy this year, including more than two dozen retailers since the coronavirus outbreak. Among the hardest hit have been department stores, which were already struggling to respond to shoppers’ shift to online shopping. The parent companies of Ann Taylor, Justice and Men’s Wearhouse, all of which have stores in the North Attleboro mall, are among those that have sought bankruptcy protection.