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The Plano, Texas-based retailer has reportedly been in talks about restructuring, with speculation that it would file for bankruptcy as soon as Friday.
The May 14 payment had been due on May 7, and J.C. Penney had a grace period of five business days before defaulting, which executives used to weigh strategic alternatives that remain under consideration, according to the filing.
Store closings due to the COVID-19 pandemic have made a rocky retail market even more difficult, with Neiman Marcus and J. Crew both filling for Chapter 11 bankruptcy earlier this month.
J.C. Penney announced in February the appointment of six executives to help execute its turnaround plan. In October, the retailer rolled out new concepts in an effort to return to profitability, including remodeling stores with fitness studios, video game lounges and cafes.
Shares of the retailer have seen their value almost completely wiped out by a change in consumer preferences and a shift to e-commerce from brick-and-mortar shopping.
The company’s market capitalization hit a peak of $19.5 billion on June 19, 1998, according to Dow Jones Market Data. It was below $63 million at the end of the day Thursday.