Tags: US | General | Growth | Bankruptcy

General Growth Files Plan to Exit Bankruptcy

Thursday, 01 Apr 2010 08:28 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

General Growth Properties Inc. asked a bankruptcy court judge late Wednesday to approve a plan for its exit from Chapter 11 bankruptcy protection that gives the shopping mall giant until the end of the year to court buyout offers.

If approved by U.S. Bankruptcy Judge Allan Gropper in New York, the plan also would set a floor on offers for General Growth at $15 a share. That's higher than a $9 a share offer from rival Simon Property Group Inc. that General Growth rejected last month.

The move sets the stage for Simon, the nation's largest shopping mall operator, to potentially sweeten its $10 billion offer — something the company has been considering, according to two people familiar with the matter. They spoke on condition of anonymity because they were not authorized to discuss the matter publicly.

Investors have been anticipating as much, driving shares of General Growth more than $1 above the value of General Growth's proposed plan to $16.09 on Wednesday.

"The proposed transaction further builds on the tremendous momentum we have achieved in the bankruptcy process to address our capital structure and put the company on a solid financial foundation for the future," CEO Adam Metz said in a statement.

Despite being in bankruptcy protection for nearly a year, Chicago-based General Growth finds itself in the unusual position of courting buyout offers that promise to pay off creditors in full and give shareholders a premium over the current stock price.

General Growth is looking for a higher offer and has put forward a plan that calls for Canadian property manager Brookfield Asset Management Inc., Fairholme Capital Management and Pershing Square Capital Management Inc., to put up more than $6.5 billion combined to help General Growth emerge from bankruptcy as a standalone company.

The proposal, which would split General Growth into two companies, also would pay off unsecured creditors in full, General Growth said.

Fairholme is one of General Growth's largest unsecured creditors, while Pershing Square is one of its largest shareholders.

Gropper must also approve so-called bid protections that would compensate the investor group should General Growth sell the company to another bidder. Under the plan, General Growth will issue warrants to the investor group to buy 120 million shares of General Growth at an exercise price of $15 a share.

If approved, the warrants are good through Dec. 31, giving General Growth a time cushion should its efforts to exit bankruptcy drag on beyond this summer.

A bankruptcy court hearing on the matter is expected in late April.

General Growth operates more than 200 shopping malls in 43 states and is the nation's second-largest shopping mall operator. It sought shelter from creditors last April, resulting in the largest real estate bankruptcy in U.S. history.

To date, the company has restructured some $14 billion in secured debt and has about another $1 billion left to resolve, primarily on debt secured by two properties in Las Vegas, the Fashion Show mall and The Shoppes at The Palazzo.

Shares in Simon Property slipped $1.26 to $83.90 on Wednesday. Brookfield shares were unchanged at $25.42.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Lawyers: Dallas Hospital Not at Serious Risk Over Ebola Death

Wednesday, 22 Oct 2014 23:27 PM

If they decided to seek more than an apology from Texas Health Presbyterian Hospital, the family of Thomas Eric Duncan,  . . .

Nancy Snyderman, NBC Crew Freed From Ebola Quarantine

Wednesday, 22 Oct 2014 19:47 PM

NBC News' chief medical editor, Dr. Nancy Snyderman, and the rest of her crew have been released from their 21-day Ebola . . .

Report: Secret Service Blasted Again for Improper Behavior

Wednesday, 22 Oct 2014 18:51 PM

The Secret Service is in trouble again, this time over a report that agents improperly became involved in a domestic has . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved