Private equity firm Sycamore Partners is in preliminary talks to get JCPenney out of bankruptcy in the event the US department store chain negotiations with its creditors fail, three people who know the matter said on Friday.

JCPenney shares jumped nearly 55 percent on the news.

JCPenney, which employs around 85,000 people, filed for bankruptcy protection in May after the pandemic coronavirus forced him to temporarily close more than 800 stores across the US, adding to the financial problems caused by years of reduced sales.

Sycamore is considering buying JCPenney directly or investing in a problematic retailer, the source said.

There is no certainty that talks between Sycamore and JCPenney will result in an agreement, which will require bankruptcy judge approval, the source said.

JCPenney is also in contact with several owners, including Brookfield Asset Management and the Simon Property Group, about the possibility of a transaction, the source said. Under one scenario being explored, Sycamore, Brookfield and Simon will join the effort to JCPenney, two sources said.

The source requested anonymity because the discussion was confidential. Sycamore and JCPenney declined to comment. Brookfield has no immediate comment while Simon does not immediately respond to requests for comment.

JCPenney is in discussions about giving up control to its lenders in exchange for reducing nearly $ 5 billion in debt. This relies on many investment companies that hold senior corporate debt and have provided bankruptcy financing for the company to approve the JCPenney business plan on July 14.

If the company based in Plano, Texas does not persuade enough lenders to approve its plans the next day, July 15, its bankruptcy loan requirements require JCPenney to abandon reorganization efforts and pursue sales.

It is unclear how much Sycamore is willing to pay for JCPenney, who is in the process of closing shop and permanently cutting work.

Sycamore, a private equity firm in New York specializing in retail and consumer investment, has in the past controlled well-known businesses such as the Staples office supply chain, Talbots women’s clothing retailer and Belk department store operator.

Last month, Sycamore came out of a $ 525 million deal to buy a majority stake in L Brands’s Victoria’s Secret, when the pandemic was hammering sales in the clothing chain.

Brookfield and Simon operate malls throughout the US. Brookfield in May said it would devote $ 5 billion to non-control investments designed to revitalize retailers struggling after a coronavirus outbreak.

During a court hearing on Thursday, US Bankruptcy Judge David Jones approved new funding from senior lenders to help JCPenney’s operations while navigating Chapter 11 protection, and expressed concern that the 118-year-old chain needed to restructure quickly to survive.

In July, lenders will “decide whether the dream is alive or the dream is dead,” said Cathy Hershcopf, a creditor lawyer, during the hearing.

Under the plan that is being discussed with its creditors, JCPenney will be divided into two companies. One is a real estate investment trust that will take part of company property and lease it back to JCPenney. The other will operate the JCPenney retail business.

Joshua Sussberg, a Kirkland & Ellis LLP lawyer representing JCPenney, said during Thursday’s trial that the company needs to persuade lenders to negotiate to keep the restructured business alive and that he plans to hold them accountable for the ending case.

Even in less busy times, many retailers, including Barneys New York Inc. and Toys ‘R’ Us, have failed to reorganize under bankruptcy and bankruptcy protection for good.

JCPenney said Thursday it will permanently close 154 stores, and may close more. So far almost 500 stores have reopened so far due to a pandemic, and plan to bring additional locations online in the coming weeks. However, there remain concerns that customers may be slow to return amid health problems and job losses not seen since the Great Depression.

JCPenney also requested permission from landlords to pass rent payments for June, July and August, Sussberg said last week.