JCPNQ.US has reached an impasse in talks with its owners over a bankruptcy takeover. Unless the company can reach an agreement to be taken over by lenders within a few days, it will force Penny to close more stores.

Joshua Sussberg, a lawyer for Penney, said at a court hearing on Monday that negotiations between the company and mall owners SPG.US and Brookfield Property Partners LP (BPY.US) had reached an impasse over the weekend, but the lawyer did not elaborate on why.

On the other hand, the lawyer said lenders were still ready to save the company and its more than 70,000 jobs, depending on negotiations over the next 10 days. Andrew Leblanc, the lender's lawyer, said there were many obstacles to reaching such an agreement, and it was onerous to negotiate and reach an agreement in a short period of time. The deadline set by the two sides is September 10.

Penny, which filed for bankruptcy protection in May, is racing to reach an agreement to divide its business into three parts. One of the companies will run Penny's retail business, including its intellectual property rights and hundreds of stores.

Lenders will cancel some of Penney's $5 billion debt to control two other real estate investment trusts after the spin-off. One of them will own 160 properties, while the other will control the company's distribution center.

Penny had hoped to reach a deal with Simon Real Estate and Brookfield to take over Penny's retail business. But lawyers for Penney said negotiations with the two companies ran into problems earlier this month before the stalemate.

Penny's lenders, including hedge funds and private equity firm Sycamore Partners, which financed its bankruptcy, have now agreed to further debt forgiveness to control retail operations outside the two real estate investment trusts.

Sycamore Partners and Hudson Bay, a Canadian department store operator, also held talks with Penny to control its retail business, but no agreement was reached, according to people familiar with the matter.