Some of the entities that financed some of the General Growth Properties’ malls want those assets taken out of the REIT’s bankruptcy filing.
“The legal separation would give the lenders greater control over the fate of the malls and access to all the excess cash they generate,” according to Reuters.
When GGP filed for bankruptcy, it also included 166 of its individual properties as part of the measure. Some lenders, like ING Clarion Capital Loan Services, are saying that the malls it provided loans for are doing fine operationally and that GGP is just using them for leverage in its overall bankruptcy filing.
Metropolitan Life Insurance, for one, takes issue with the inclusion of White Marsh Mall, in Baltimore.
And in other news, Lord & Taylor has decided to close at GGP’s Landmark Mall in Alexandria, VA. The mall owner was going to tear that asset, also listed in the bankruptcy, down and build an open-air center instead, but the economy had something to say about that.
Thanks for the heads up. This is actually a pretty big deal, because “bankruptcy remote entities” are at the very heart of securitization of commercial real estate mortgages, and this issue is so crucial that the ABA is already sponsoring a seminar (on Wednesday, June 3) on the subject “Consolidation of SPEs in Bankruptcy After General Growth: Is Bankruptcy Remote Status Achievable?”
You made reference to an ABA seminar on the consolidation of SPE’s in Bankruptcy. Is this a webinar (web seminar)? I went on the American Bar Association site and didn’t see it. Would like to follow up. Thanks.
“Consolidation of SPEs in Bankruptcy After General Growth: Is Bankruptcy Remote Status Achievable?”
Begins: Jun 03, 2009 01:00 PM
Ends: Jun 03, 2009 02:30 PM
Website: http://tinyurl.com/onh5lz
GGP has mostly excellent assets with promise of greater value in a recovered economy – debt loan is the principal issue for this company.
The whole problem with after the fact trying to unravel these CMOs and mortgage backed securities, is that it’s like first selling a cow, then slicing it up to sell off the parts to someone else – who then repackages the parts in “trenches” that then get sold to someone else. Now you’re asking the last person who bought part of the pieces, to put the cow back together, and you’re asking the cow to get up and walk out of the barn to be sold to someone else. It’s a bloody mess and quite impractical, good luck.
they should take their medicine like everyone else!
Our industry needs to be paying far more attention to this case. The rulings of Judge Gropper to effectively consolidate the bankruptcies of the SPE’s into a single case completely undermines the concept of secured finaning and mortgage finance. If the pledged securite (i.e. real estate) can not be relied upon in a bankruptcy, then mortgages mean nothing and interest rates for real estate will be permanently risk adjusted much higher. This would be a structural change in the cost of financing real estate that would permanently deminish the value of real estate. More critically in the short term, Judge Gropper’s ruling, despite his claims to the contrary, will effectively scuttle any recovery of the CMBS market, and, in turn, any recovery of the real estate market.
Those who file for bankruptcy should take lessons from the Wild Catters, and Developers in Texas who’ve filed BK upteen times then get right back in the game. It’s just another educational lesson.
I thought this “click” from Globe St. would send to an article about finding retilaers on a Blog web site? All I see here is bankruptcy information.
Where can I find out about the retailers listed on a map?
http://globestcounterculture.wordpress.com/2009/06/04/fun-with-maps-a-breakdown-of-retail-stores-by-state/