Mayfair Mall owner files for bankruptcy
Chicago-based General Growth Properties Inc., the owner of Mayfair Mall in Wauwatosa, announced today that it is seeking relief to reduce and restructure its debts under Chapter 11 of the U.S. bankruptcy code.
"All day-to-day operations and business of all of the company’s shopping centers and other properties will continue as usual," General Growth said in a news release. "The company intends to work with its constituencies to emerge from bankruptcy as quickly as possible while executing on a plan of reorganization that preserves the company’s integrated, national business operations."
General Growth’s stock closed at $1.05 Wednesday, far below its 52-week high of $44.23.
General Growth is a real estate investment trust (REIT) and is the second-largest owner and operator of malls in the United States, behind only Indianapolis-based Simon Property Group Inc., which owns Southridge Mall in Greendale. General Growth owns or operates more than 200 shopping malls in 44 states, encompassing about 200 million square feet of space.
Many owners of retail real estate have struggled during the recession as shoppers are spending less money, resulting in numerous store closings and empty spaces in shopping centers.
General Growth said its problems are a result of the crisis in the credit markets. The company said its decision to file bankruptcy, "came after extensive efforts to refinance or extend maturing debt outside of Chapter 11. Over many months, the company has endeavored to negotiate with its unsecured and secured creditors to obtain the time needed to develop a long-term solution to the credit crisis facing the company. Unable to reach an out-of-court consensus, the company reluctantly concluded that restructuring under the protection of the bankruptcy court was necessary. During the chapter 11 cases, the company will continue to explore strategic alternatives and search the markets for available sources of capital. The company intends to pursue a plan of reorganization that extends mortgage maturities and reduces its corporate debt and overall leverage. This will establish a sustainable, long-term capital structure for the company."
General Growth also announced that it has received a commitment for a debtor-in-possession financing facility of approximately $375 million from New York-based Pershing Square Capital Management, L.P., as agent.
"When approved by the bankruptcy court, the new facility will provide a source of funds to the company during the chapter 11 process," the company said.