J.C. Penney’s attorney said that talks to find a buyer have reached a “stalemate” and time is running out to keep the department store chain alive. Discussions with three potential bidders, including the company’s major mall landlords Simon Property Group and Brookfield, had been underway and could possibly keep hundreds of stores open for business. To avoid a liquidation, J.C. Penney’s top lenders, including H/2 Capital Partners, are now set to make a credit bid to own the retailer as a standalone company. The deadline to reach an agreement is September 10. Allegedly, J.C. Penney and its lenders were previously planning to split the company up; one publicly traded real-estate investment trust to own 160 locations, one REIT to own distribution centres, and a third operating company to own the brand and its intellectual property.

“Our lenders are no longer going to be held hostage in negotiations with third parties”, said Joshua Sussberg, Attorney at Kirkland & Ellis. “While it is possible that one of the bidders comes back into 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.” J.C. Penney could close a number of additional stores as talks with bidders fail to advance.

According to some media reports, e-commerce giant Amazon could use vacant J.C. Penney and Sears stores as distribution centres. Read more here.

Sources: CNBC/Barron’s