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The Mall I am currently working at is filing for Bunkrutpcy...

D

DamnRena

Senior member
well i own a business in the mall. I work 7 days a week and this was my first year here in this mall. Well i was watching Fast and Furious and a security guy came in here and gave me a piece of paper saying the Mall filed for chapter 11. WTH! This mall is a very nice place * Carolina Place Mall *. what is going to happen? will this mall eventually close down? or will someone else be in charge?
 
Under a Chapter 11 the business has the right to renegotiate money losing contracts, leases, etc or break them. If they are losing money on your presence you will probably get the boot or if they owe YOU money I would be worried. Otherwise, I wouldnt worry about anything as the purpose of Chap 11 is to reorganize debts (trade the owners equity for outstanding debt and wipe out unsecureds) to become profitable again.
 
One of the biggest mall owners is filing for bankruptcy, I assume that's who owns your mall as well. Should be business as usual.
 
chapter 11 is reorganization. basically the shareholders will be left with nothing and the bondholders may or may not get a piece of the company based on their seniority and what is left. some malls may be closed, but those will be the underperforming ones.
 
Bloomberg

April 16 (Bloomberg) -- General Growth Properties Inc. filed the biggest real estate bankruptcy in U.S. history after amassing $27 billion in debt during an acquisition spree that turned it into the second-largest shopping mall owner.

The owner of Boston?s Faneuil Hall and the South Street Seaport in New York City ended a seven-month effort today to refinance its debt. The company listed $29.5 billion in assets and debts of about $27.3 billion in the Chapter 11 filing. General Growth will continue operating its more than 200 properties.

?We intend to emerge as a leaner company,? General Growth President Thomas Nolan said in an interview today. ?We want to come out as a less leveraged company. Our business model remains strong.?

General Growth collapsed after spending $11.3 billion to buy commercial-property developer Rouse Co. in 2004 only to get caught in the credit crunch and a U.S. recession that has cut spending and property values. Banks have reduced lending amid mortgage-related writedowns. Commercial real estate prices in the U.S. dropped 15 percent last year, according to Moody?s Investors Service. Retail sales in the U.S. unexpectedly fell in March as soaring job losses forced consumers to pull back.

The filing lists Eurohypo AG, a unit of Commerzbank AG, as General Growth?s largest unsecured creditor with claims totaling $2.59 billion under two loans. Noteholders are owed about $4 billion.

Simon Gains?

The bankruptcy may remake the nation?s mall business and allow General Growth competitors including Simon Property Group Inc. to buy properties and strengthen its position as the No. 1 mall owner, said Dan Fasulo, managing director at real estate research firm Real Capital Analytics.

?I think Simon?s going to be able to pick up some of these assets on the cheap,? Fasulo said in an interview.

General Growth?s filing is the ?beginning of the distress cycle? and may lead other companies to fail.

?This is kind of the beginning of the end,? Fasulo said. ?This bankruptcy will drive down the values of mall assets in the United States. It?s going to put, I believe, more supply on the market than can be absorbed by investors.?

In an interview with Bloomberg Television, Nolan said: ?We?re not looking for wholesale sales of assets. It?s possible we could choose some to be non-strategic going forward.?

Hedge fund manager William Ackman?s Pershing Square Pershing Square Capital Management LP will provide General Growth with $375 million in financing to help run the company during the Chapter 11 process, today?s statement said. Ackman is likely to play a key role in the reorganization since Pershing is the third-largest shareholder, according to Bloomberg data.

Rouse Deal

Much of the company?s debt can be traced to its purchase of Rouse Co. in 2004, which owned malls including South Street Seaport. As Chicago-based General Growth struggled to meet debt deadlines, it lost 81 percent of its market value in the last six months after saying repeatedly it may have to file for bankruptcy.

Nolan said General Growth, the largest mall owner after Simon Property Group Inc., was a victim of ?a broken capital market.? No one could have predicted the severity of e ?the credit markets shutting down,? he said.

The company plans to file a reorganization plan by the end of the year, he said.

Rouse and 165 units were included in the bankruptcy filing. General Growth said several properties that are part of joint ventures weren?t included.

?Disaster?

The company on March 23 said that a deadline for bondholders to agree to new terms for $2.25 billion in debt expired without the minimum number of holders accepting the agreement. General Growth said on March 30 it was continuing to negotiate with creditors.

?It was a disaster waiting to happen,? said Patrick Sumner, head of real estate securities at Henderson Global Investors in London. ?They didn?t realize the market was going to get like this and that they were going to be in the front line when the guns went off.? Henderson doesn?t own General Growth shares.

Standard & Poor?s in November removed General Growth from the S&P 500 Index, saying the mall owner?s stock-market value of about $128 million at the time ranked it last in the index.

Two weeks later, Ackman?s bought a 20 percent interest through shares and swaps. The hedge-fund manager has since boosted its General Growth stake.

Family Control

General Growth?s history stretches back to 1954, when brothers Matthew and Martin Bucksbaum expanded their family?s grocery business by building the Town and Country Center in Cedar Rapids, Iowa, one of the Midwest?s first regional shopping malls. General Growth became the No. 2 U.S. mall owner in 1989 when it bought the assets of Center Cos., and in 1993 raised about $300 million in an initial public offering.

For the first time in its history, General Growth in October was turned over to someone outside the family when it replaced CEO John Bucksbaum, Matthew?s son, with 47-year-old Metz. John Bucksbaum, 52, replaced his father as chairman last year, and remains in that position. Martin Bucksbaum died in 1995.

John Bucksbaum?s removal as CEO followed the October departure of Chief Financial Officer Bernard Freibaum after he sold 2.95 million shares to meet margin calls. An affiliate of a Bucksbaum family trust had loaned Freibaum $90 million to pay margin debt. Bucksbaum?s failure to disclose the loan violated company policy, a review by General Growth?s independent directors found.

?Too Much Debt?

Marcia Goldstein of Weil Gotshal & Manges LLP and James Sprayregen of Kirkland & Ellis LLP will represent General Growth in bankruptcy. The company also hired turnaround firm AlixPartners LLP and investment bank Miller Buckfire & Co.

General Growth closed at $1.05 in New York Stock Exchange composite trading yesterday, valuing the company at $329 million. The shares traded as high as $67 in March 2007.

?General Group has long been the poster child of too much debt,? said Rich Moore, a managing director at RBC Capital Markets in Solon, Ohio. ?There?s finally been some comeuppance for having too much debt. I think that?s the key point to take home for the other guys.?

The case is: In re General Growth Properties Inc., 09- 11977, U.S. Bankruptcy Court, Southern District of New York. It was assigned to U.S. Bankruptcy Judge Allan Gropper.
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My town only has one mall and it's on its last leg. There is certainly enough people in the area to support the mall (100k people in the county) but for some reason it's doing poorly.

Originally there were five "anchor" stores: JC Penny, Dillard's, Macy's and Peebles. Right now JC Penny is the only anchor store left, the other four spaces are empty. The mall has a food court with space for 18 restaurants and they are all vacant. There are 43 "regular" spaces which are all vacant save for one, a hair salon.

It's sort of creepy walking through the building now. The owner has quit maintaining almost everthing. There are three, large atriums that used to have banners, advertisements, plasma displays and cart vendors - now they are completely empty.
 
Originally posted by: Queasy
Bloomberg
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Stuff like this makes me think that the sudden increase in the stock market, starting around 1996, was just artificial growth, or more precisely, unsustainable growth. Lots and lots of debt was quietly taken on, and now the market is finally seeing it all. The biggest bubble in the market's history is correcting itself.


Originally posted by: Printer Bandit
gerald celente was right when he predicted there will be ghost malls.
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That'll be awkward when Ghostbusters opens up a franchise in one of the shops there.

 
Depends on the new management's plans. We had some things like that happen here and the one mall is now empty yet still not willing to honor old leases.

If your mall is very successful you should be ok, if it's on the fringes maybe not.

How many anchor stores to you have and is the clientele all 'decent'? The mall above started getting a 'gangsta' prescense...customers didn't care to see guard towers in the parking areas or armed security in places they were hoping to spend money and walk out with merchandise.

The average shop there had 3-10 times the average 'shrink' other malls did.
 
Originally posted by: Printer Bandit
gerald celente was right when he predicted there will be ghost malls.
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That wasn't much of a prediction (meaning it was so very obvious). The US has 6 times more retail space per person than the next largest retail space country. Not 6 times the average country, but 6 times the country with the 2nd most overcapacity of retail space. Commercial property went on a boom that dwarfs the housing boom in its excess. This is the next bust - and people have been predicting that for ages.

I've never heard of Celente, but a wikipedia article made it appear like he made that prediction just a few weeks ago. The real forcasters predicted this problem years ago. Specific locations may do quite well, but in general I wouldn't want to be owning any retail space for the next 10-20 years. Renting is just fine though as you won't be harmed by the plummeting commercial real estate values.
 
I've been keeping up with this. They're actually doing a debt restructuring, and their outlook looks good.

Everything should be cool.
 
Originally posted by: Hacp
Malls are just a waste of space. With internet retailing, I foresee more malls closing.
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Yeah, indoor malls are old hat. What they're doing today is making "shopping towns". These are actually very popular. They just built one near me and we like going there on weekends when the weather is nice just to hang out. The way it's laid out it reminds me of a old time Normal Rockwell town.

 
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