Mall owner might hand over 13 properties to lenders


POSTED: Friday, June 04, 2010

General Growth Properties Inc., the second-largest mall owner in the United States, said it has identified 13 “;underperforming”; retail properties that may be turned over to lenders after the company emerges from bankruptcy.

None are in Hawaii.

General Growth, which owns Ala Moana Center and Ward Centers on Oahu, has until two days after it exits bankruptcy to decide whether the properties, which serve as collateral on loans, should be deeded to lenders or the loans should be modified, the Chicago-based company said yesterday in a filing with the U.S. Securities and Exchange Commission. The company plans to leave Chapter 11 bankruptcy protection by Sept. 30, President Tom Nolan said last week.

Of the 13 retail properties that might be turned over to lenders, which General Growth calls “;special consideration properties,”; five had emerged from bankruptcy protection as of the end of 2009. The company had a gain of $54.2 million related to their reorganization. The eight other properties emerged in the first quarter, resulting in a $69.3 million gain, General Growth said in yesterday's filing.

The properties, consisting of 12 malls and one community center, are in Virginia, Michigan, Louisiana, Tennessee, Utah, Colorado, California and Florida, according to a list provided by a person with knowledge of the plans. The person asked not to be named because the properties haven't been made public.

They include Grand Traverse Mall in Traverse City, Mich., a regional shopping center; Oviedo Marketplace in the Orlando suburb of Oviedo, Fla.; and Chapel Hills Mall in Colorado Springs, Colo., according to the list.

General Growth filed the biggest U.S. real estate bankruptcy in April 2009 after amassing $27 billion in debt by making acquisitions. The company was at the center of a takeover battle between Simon Property Group Inc., a larger rival, and a group led by Brookfield Asset Management Inc.

Simon withdrew its offer May 7, the same day a bankruptcy court approved a plan for General Growth to emerge with investments by Brookfield and its partners.

General Growth said in court papers filed yesterday that it needs more time to settle or fight thousands of claims from creditors in its bankruptcy case.

General Growth said it has resolved or is preparing objections to about two-thirds of 10,000 claims for payment filed against the company. It's seeking more time to review and object to about 3,400 claims, the mall owner said in its court filing.

The claims filed against General Growth totaled $250 billion last year, “;a number that obviously is far greater than”; its actual liabilities, the company said in court papers. General Growth listed total debts of $27 billion in its bankruptcy filing.