SOUTH PORTLAND — Chicago-based General Growth Properties, owner of the Maine Mall, announced early Thursday morning that it has voluntarily filed for bankruptcy protection.
Of the more than 200 malls owned by GGP in 44 states, 158 have been included in the Chapter 11 filing, which is intended to allow the company, under court supervision, to restructure its business operations and reduce its debt while continuing normal business operations and providing protection from creditor lawsuits.
The Maine Mall and its outlying properties are included in the filing.
The company blamed “the broken credit markets” for its need for bankruptcy protection.
“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 to refinance maturing debt outside of Chapter 11,” GGP Chief Executive Officer Adam Metz said.
According to documents filed in U.S. Bankruptcy Court for the Southern District of New York, GGP claimed $29.5 billion in assets and $27.3 billion in liabilities as of Dec. 31, 2008. As of Thursday morning, a bankruptcy court hearing had not been scheduled.
GGP said it received a $375 million debtor-in-possession commitment that will finance business operations while it restructures maturing mortgage loans, reduces corporate debt, and establishes a stable long-term capital structure.
“We don’t expect any of our visitors to notice any difference in our quality of service to our customers,” Metz said.
In a 2008 year-end earnings release, GGP said it had nearly $1.8 billion in past due debt, along with another $4 billion in debt that could be accelerated. The company also said it had $1.44 billion in consolidated mortgage debt and about $595 million in unsecured bonds scheduled to mature in 2009.
In an attempt to address some of its financial woes, the company suspended cash dividends, instituted cost reduction and efficiency programs, reduced it’s workforce by 20 percent and sold certain non-mall assets. It also halted or slowed all development and redevelopment projects.
In South Portland, GGP recently received Planning Board approval for a new development across from Best Buy on Maine Mall Road, but postponed the project due to the economic downturn. Prior to that, the company pulled the plug on a revitalization project that would have added a cinema and four restaurants at the Maine Mall.
Meanwhile, the company is pursuing a $900,000 rebate from South Portland on its 2006 tax bill. The company believes its property was overvalued by about $70 million by the city assessor following a revaluation in 2006.
A hearing with the Maine Board of Property Tax Review scheduled for last week was postponed.