Commercial real estate loans are the next shoe to drop in the credit crisis. There was tremendous overbuilding in malls, strip malls, department stores, hotels and restaurants during the past 10 years. It will take some time to deal with many bankruptcies like this one that are sure to come over the next two years.-LouMall operator files for bankruptcy protection
Mall operator General Growth Properties files for Chapter 11 bankruptcy protection
LOS ANGELES (AP) -- General Growth Properties Inc., the nation's second-largest mall operator, filed for Chapter 11 bankruptcy protection early Thursday after it failed to persuade a majority of its debt holders to give it more time to refinance billions of dollars in debt racked up during the housing boom.
The news sent the real estate investment trust's stock down 60 cents, or 57 percent, to 45 cents in electronic premarket trading. Its stock traded last spring as high as $44.23.
The move by the Chicago-based company had been widely anticipated since the fall, when the company warned it might have to seek bankruptcy protection if it didn't get lenders to rework its debt terms. Efforts to negotiate with its unsecured and secured creditors ultimately fell short late last month.
"While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of Chapter 11," Chief Executive Adam Metz said in a statement.
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