JCPenney could be bought by its lenders after talks with potential buyers stall due to 'egos' and 'negotiating postures,' lawyers say
- A lawyer for
JCPenneysaid in a bankruptcycourt hearing Monday that discussions with three bidders for the business had reached a "stalemate."
- The department store chain's top lenders are now set to place their own bid.
- "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," Kirkland & Ellis' Joshua Sussberg, attorney for JCPenney, said during the hearing.
- A number of additional JCPenney stores will also be slated to close.
The fight to keep JCPenney alive is moving in a different direction.
A lawyer for the bankrupt department store chain said in a hearing Monday that discussions with three bidders to take over the business had reached a "stalemate," and that the company's top lenders are putting together their own bid. The sale is expected to be complete in the next 30 days.
Three separate bidders — private-equity firm Sycamore Partners, Saks Fifth Avenue owner Hudson's Bay, and a joint venture between mall owners Simon Property Group and Brookfield Property Partners — were reported to be in the running to acquire JCPenney out of bankruptcy. Those talks have been confidential.
Kirkland & Ellis' Joshua Sussberg, attorney for JCPenney, said in Monday's hearing that discussions with these bidders were going well as recently as this weekend. But negotiations quickly took a turn.
"Certain negotiating postures and egos, however, have not necessarily been set aside over the course of the last two weeks, because it's failing. Our drive in the red zone stalled," Sussberg said. "All while the business has suffered, as our vendors, stand by with bated breath, waiting for an announcement, at the same time, holding inventory and the word that JCPenney will in fact back be around for the foreseeable future."
Sussberg continued: "While it is possible that one of the bidders comes back to 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."
In an order on August 19th, Judge David Jones urged all parties to push egos aside and complete negotiations as quickly as possible.
JCPenney's top lenders include H/2 Capital Partners, Silver Point Capital, Brigade Capital Management, and Sculptor Capital Management.
Sussberg added that a number of additional JCPenney stores will close.
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