A sweeping deal to sell more than 115 JCPenney stores across the United States unraveled just after Christmas, sending shockwaves through the retail property market. The sale of JCPenney store collapses after buyer Onyx Partners failed to close a $947 million transaction by a Dec. 26 deadline, according to regulatory filings.

Copper Property CTL Pass Through Trust terminated its agreement with the Boston-based private equity firm, saying it met every contractual condition while the buyer did not. The trust disclosed the breakdown in a federal filing, framing the missed deadline as a fatal breach.

Lawsuit Erupts as Blame Flies

Onyx fired back swiftly, filing a lawsuit seeking either specific performance of the deal or monetary damages. The firm alleges Copper Property breached the agreement, a claim the trust flatly rejects.

Copper Property said it will “aggressively contest” Onyx’s allegations and pursue counterclaims of its own. Neither side responded to requests for further comment, leaving the dispute to play out in court.

The failed transaction had loomed large. Valued at nearly $1 billion, it stood as one of the biggest pending retail real estate sales in the country, spanning 35 states and Puerto Rico and covering about 15.5 million square feet of leasable space.

A Deal Too Big to Ignore

Before the termination, Onyx told CoStar it remained prepared to close once Copper Property delivered outstanding tenant documentation. The buyer contended that key seller deliverables were still incomplete.

Copper Property counters that it fully complied with the agreement and is now reviewing “all legal rights” against Onyx and other parties involved in the deal.

Deposits, Deadlines and Distribution Plans

The financial fallout is already taking shape. Copper Property currently holds $2 million of Onyx’s $5 million deposit and is demanding the remaining $3 million from the escrow agent. Onyx disputes that claim.

The trust said it may distribute the $2 million it holds to stockholders on Jan. 9 as part of its regular monthly cash payment, even as the legal fight simmers.

Restarting the Sales Clock

With the deal dead, Copper Property must relaunch its sales process under tighter timelines. The trust is tasked with liquidating remaining properties to repay creditors tied to JCPenney’s 2020 bankruptcy, and the collapse could trigger default provisions that complicate recoveries.

Looking ahead, the trust plans to halt its current marketing efforts and explore alternatives in early 2026. Those options range from selling the entire portfolio or sub-portfolios to individual property sales, financing transactions, or a mix of strategies.

Copper Property previously received more than 700 inquiries when the assets were first marketed through Newmark and Hilco Real Estate, underscoring the scale of interest in the portfolio.

Leases Still Hold the Line

Despite the turmoil, J.C. Penney continues to operate under triple-net master leases at all the locations. Under those agreements, tenants cover insurance, taxes and maintenance costs — a stabilizing factor as the trust charts its next move.

For now, the sale of JCPenney store collapses like a snapped chain, leaving a billion-dollar question mark over one of the nation’s largest retail property portfolios.