A plan to sell bankrupt JC Penney Co’s retail operations to its two biggest landlords stalled, raising the prospect that creditors will carry the burden of millions of dollars in extra costs as the retailer prepares for the crucial holiday season.
Talks between JC Penney’s lenders and the would-be buyers, mall owners Simon Property Group and Brookfield Property Partners, broke down in recent days, according to people with knowledge of the negotiations. The landlords missed several deal deadlines as communication between the parties lapsed, the people added.
The two sides will now turn to mediation to help them determine if they can close the deal, and on what terms, according to the people, who asked not to be identified discussing private information. They met to begin that process, the people said.
An attorney for the company has said disputes won’t stand in the way of a final agreement.