General Growth Announces Bankruptcy Reorganization
General Growth Properties Inc., the second-largest shopping-mall owner and operator in the United States, announced reorganization plans to emerge from Chapter 11 bankruptcy by October.
In the reorganization plan, GGP will split into two publicly traded companies. New GGP will devote itself to owning and operating 180 malls in 43 states. The other new company, Spinco, will operate GGP’s other properties, such as master-planned residential communities and some malls.
Adam Metz, GGP’s chief executive officer, said the companies would be controlled by different boards and employ different executives. However, current GGP shareholders would receive common stock in both companies.
The reorganization plan will be funded by $8.55 billion coming from affiliates of Brookfield Asset Management, Fairholme Capital Management and Pershing Square Capital Management.
The reorganization plan was filed in the U.S. Bankruptcy Court for the Southern District of New York, where the original bankruptcy was filed in April 2009. The court has scheduled a hearing for the reorganization plan on Aug. 19.
GGP owns and operates 21 malls in California, including the prominent retail centers Stonestown Galleria in San Francisco, Glendale Galleria in Glendale, Galleria at Tyler in Riverside, Burbank Town Center in Burbank and Northridge Fashion Center in Northridge.
If the reorganization plan is approved, most of the California malls will be owned and operated by New GGP. Spinco will handle only two California retail properties, The Village at Redlands in Redlands and Elk Grove Promenade in Sacramento.—Andrew Asch
