The operators of three major shopping centers in Michigan have filed for Chapter 11 bankruptcy in the last 48 hours, just as the all important holiday season is getting underway.
Pennsylvania Real Estate Investment Trust — PREIT — which operates the Woodland Mall in Grand Rapids has announced that they have taken the step to “execute its prepackaged financial restructuring plan under which the company will be recapitalized and its debut maturities extended.”
Meanwhile, CBL Properties, in a completely unrelated announcement, has announced that they have “filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, in Houston, in order to implement a plan to recapitalize the company, including restructuring portions of its debt.” CBL operates a number of shopping centers across the country including the Meridian Mall in Okemos and Laurel Park Place in Livonia.
PREIT CEO Joseph Coradino said in his company’s statement, that “Today’s announcement has no impact on our operations — our employees, tenants, vendors and the communities we serve — and we remain committed to continuing to deliver top-tier experiences and improving our portfolio.”
In PREIT’s case, the banks have committed to provide an additional $150-million to recapitalize the business and extend the company’s debt maturity schedule.
At CBL Properties, CEO Stephen Lebovitz says, “After months of discussions and consideration of a number of alternatives, CBL’s management and the Board of Directors firmly believe that implementing the comprehensive restructuring as outlined in the RSA through a Chapter 11 voluntary bankruptcy filing will provide CBL with the best plan to emerge as a stronger and more stable company,” and adds, “With an aggregate of approximately $1.5 billion in unsecured debt and preferred obligations eliminated and a significant increase to net cash flow, upon emergence, CBL will be in a better position to execute on our strategies and move forward as a stable and profitable business.”
Like PREIT, officials at CBL reassure everyone that “All day-to-day operations and business of the company’s wholly owned, joint venture and third-party managed shopping centers will continue as normal. CBL’s customers, tenants and partners can expect business as usual at all of CBL’s owned and managed properties.”
The Woodland Mall was closed down completely from March 23rd through June 1st except for a few shops and food-service providers who offered curbside pick-up during the height of the pandemic shutdown.
