General Growth Properties Inc. said Wednesday it filed a plan of reorganization in which lenders have agreed to restructure $9.7 billion in secured loans.
The $9.7 billion in restructured mortgage loans exceeds the $8.9 billion announced last month.
The Chicago-based mall operator said the restructured loans involve 92 of the 166 regional shopping centers, office properties and related subsidiaries that filed Chapter 11 along with the real estate investment trust in Manhattan bankruptcy court in April.
Thomas H. Nolan Jr., president and chief operating officer of General Growth, said, “Our successful completion of agreements in principle with additional mortgage lenders shows our continued progress. We will continue to work with our other secured mortgage lenders and are hopeful that we will reach additional consensual agreements quickly.”
A hearing in a Manhattan bankruptcy court to confirm the plan is set for Dec. 15.
Greg Cross, bankruptcy partner at Venable LLP, who serves as coordinating counsel to the secured creditors, said Wednesday the consent plan is “consistent with the terms of the settlement struck” by the secured lenders, and he expects those lenders to vote in favor of the plan.
General Growth said it expects to exit bankruptcy proceedings by yearend.
Under the terms of the plan, all undisputed claims against the REIT for prepetition goods and services will be paid in full.
Legal sources familiar with the bankruptcy said even if additional deals can’t be struck with the remaining 74 entities that also filed Chapter 11 with the REIT, it would not derail the expected confirmation of the plan.
General Growth’s portfolio, consisting of either ownership interest or management responsibility, covers 200 million square feet of retail space and includes more than 24,000 retail stores nationwide.
The REIT’s Chapter 11 was the largest real estate bankruptcy in U.S. history. The mall operator said in its petition that it had $29.5 billion in assets and $27.3 billion in liabilities. Shares rose 5 cents, or 0.7 percent, to close at $6.95 Wednesday.