Paladini held initial talks to buy the Sky Bet League One club in February, and following a formal offer earlier this month, Bradford extended the period of exclusivity for the Italian to complete the purchase on behalf of the consortium he is fronting.
That deadline passed at midnight on Friday without a deal being struck, leading to reports that the Bantams could now enter talks with other interested parties.
But former QPR owner Paladini has said he did not meet the deadline because due diligence had not been completed, adding that he is also still awaiting Football League approval.
There is no suggestion that Paladini, who in March last year failed in his bid to take control of Birmingham City, will pull out of negotiations with Bradford.
A brief statement from Bradford on Friday night read: “The joint chairmen Julian Rhodes and Mark Lawn will continue to run the club as they have being doing, planning to take Bradford City forward into the new season at an exciting time for the club and its supporters.”