J.C. Penney has filed for bankruptcy and is closing their doors after being around for almost 120 years. So why does it hurt to see them go? USA TODAY

J.C. Penney is looking to go forward with a sale of the business to avoid a brush with liquidation.

The retailer's attorney, Joshua SussbergofKirkland& Ellis, saidduring a bankruptcy court hearing Wednesdaythat the sale should be completed by the fall under an expedited process and rebuffed rumors of a liquidation of the entire chain.

"We have had not one discussion with our lenders or any other stakeholders about a liquidation. That is simply not in the cards," Sussberg said.

The retailer filed for Chapter 11 bankruptcy in mid-May with846 stores and 85,000employees at the time of the filing.J.C. Penney has said it hopes to emerge from bankruptcy with about 600 stores and has begun liquidation sales at around 150 stores.(See the latest list here.)

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Before the COVID-19 pandemic, J.C. Penney was already dealing with declining sales amid digital competition, sizable debt andfalling foot traffic to shopping malls. The pandemic forced the retailer to temporarily close all of its locations, cratering sales and triggeringthe bankruptcy filing in May.

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All stores have reopened but Sussberg said the company's 173 off-mall locations continue to perform better than the 520 mall locations since reopening.

In mid-July, the company received an extension from certain lenders until July 31 to secure their approval for a business plan to restructure its operations in Chapter 11 bankruptcy and announced plans to cut 1,000 jobs.

Sussberg said Wednesday there are three separate bids being considered for sale of the company's real estate and other assets. He did not name the bidders and called the proposals confidential.He said they were actively in negotiations ahead of the Friday deadline.

During the hearing, Sussberg lambasted an article published earlier this week by The New York Post that reported a $1.75 billion bid by private equity firm Sycamore Partners to buy J.C. Penney and merge with another struggling chain Belk Inc. Sussberg called the report ill-informed."

We are moving forward with a sales process," Sussberg said. We are hopeful."

A spokesperson at Sycamore Partners declined to comment.

The coronavirus has deepened the ongoing troubles for department stores, which have had a difficult time adjusting to the rise of digital threats and nimble physical competitors that offer affordablefast-fashion apparel.

As many as25,000 stores could shutter this yearas businesses continue to feel the impacts of the pandemic, according to a recent report from Coresight Research.

Ascena Retail Group,Brooks Brothers,Lucky Brand, J.C. Penney,Neiman Marcus,Sur La TableandJ. Crew have all filed for Chapter 11 since May.

Other retailers that haven't filed for bankruptcyalso plan to shutter locations, includingVictoria's Secret,NordstromandSignet Jewelers, parent company ofKay, Zales and Jared. Tailored Brands, parent company of Men's Wearhouse, said it will close up to 500 stores.

Bankruptcy is designed to give struggling companies a second chance, so J.C. Penney could survive as a smaller, nimbler retailer with financial sustainability.

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Contributing: Nathan Bomey, USA TODAY; Associated Press

Follow USA TODAY reporter Kelly Tyko on Twitter:@KellyTyko

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J.C. Penney looks to sell company in bankruptcy to avoid liquidation - USA TODAY