General Growth Properties Inc., the second-largest mall owner in the United States, declared bankruptcy Thursday. It was the largest real estate bankruptcy in U.S. history.
General Growth and 158 of its more than 200 malls will operate under Chapter 11 protection as it seeks to refinance $27 billion in debt and restructure the business. General Growth said its properties would be open for business and operating as usual.
"Our core business remains sound and is performing well with stable cash flows," General Growth Chief Executive Adam Metz said in a statement. "While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of Chapter 11."
The bankruptcy is seen as a warning sign of trouble ahead for other large commercial properties that are heavily leveraged.
Source: Reuters News (04/16/2009)
Friday, April 17, 2009
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