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The owner of Ala Moana Center is again attempting to buy the Liberty House department store chain out of bankruptcy, this time in partnership with the retailer's mainland owner. Ala Moana owner
tries again to buy
Liberty HouseGeneral Growth's new bid
is in partnership with
Liberty House's owner
By Tim Ruel
Star-Bulletin
Chicago-based General Growth Properties Inc. yesterday filed a proposal with U.S. Bankruptcy Court to pay $148.5 million to lenders in the 2 1/2-year-old bankruptcy case, plus $23.4 million to cover all unsecured creditors.
The cash transaction, if approved by Bankruptcy Judge Lloyd King and by Liberty House Inc. shareholders, would give General Growth full ownership of Hawaii's largest retailer. It would also remove any limits on claims by the Internal Revenue Service for back taxes, which has been a sticking point in the case.
General Growth offered to buy Liberty House last month for $195 million, but withdrew its bid after Judge King said he would reject it.
General Growth's new bid, created in partnership with Liberty House owner JMB Realty Corp., would replace a plan JMB had previously submitted on its own.
Chicago-based JMB would retain major ownership of Liberty House under the old plan, but would not have any ownership under the new proposal.
"We're not able to comment at the present time, because the matter must be heard by Judge King," said Dan Murray, attorney for JMB. The plan's supporters have asked for expedited hearings, but none has been scheduled yet.
It is unclear whether the development would delay final approval of a reorganization strategy for the 150-year-old retailer. Liberty House filed for Chapter 11 reorganization bankruptcy in March 1998, listing $284.2 million in assets and $248.4 million in liabilities.
Claimants in the case are supposed to vote by Nov. 30 to pick JMB's previous plan or a competing one submitted by creditors. General Growth wants to extend the deadline for the vote, but leave the current schedule for approval otherwise unchanged. Judge King has scheduled final hearings to begin Jan. 22.
If General Growth's plan takes hold, it could have implications beyond the bankruptcy case, since Hawaii's largest mall would then own the state's largest retailer. Liberty House has 18 stores in the state, some that are major tenants in other malls.
Liberty House president John Monahan could not be reached for comment.