By Maria Halkias
The Dallas Morning News
J.C. Penney doesn’t have a deal with outsiders negotiating to buy the company, but its lender group is preparing a bid that allows the 118-year-old department store to move ahead on its own.
The Texas-based retailer’s lenders are preparing their own initial bid for the company so that a court-supervised auction can move forward. The goal is to have a transaction completed in 30 days, according to an update from lawyers at a bankruptcy court hearing on Monday.
Penney’s lawyer Josh Sussberg told U.S. Bankruptcy Court Judge David Jones on Monday that the parties have been negotiating for weeks, including through last weekend, without a deal.
The judge had called them into a sealed hearing to tell them to step up the pace after no deal emerged. Sussberg had said the process was in the “red zone,” using a football term for being close to the goal of having a buyer.
Bidding groups include Simon Property Group and Brookfield Property Partners, who together have 160 Penney stores anchoring their malls.
Private equity group Sycamore Partners was also a bidder.
A third interested buyer reportedly was Authentic Brands Group, which formed a partnership with Simon called Sparc Group that recently bought Brooks Brothers and others out of bankruptcy.
Penney is a lot bigger fish to swallow than past deals for any of those groups.
During negotiations, as issues were worked out, others would arise “like a Whack-a-mole” game, said Andrew Leblanc, lawyer for Penney’s lenders.
In July, Penney posted a loss of $342 million on sales of $564 million.
is. Everyone, focus on the end game.”