The parent company of Valley Hills Mall filed for Chapter 11 bankruptcy protection Thursday in a bargaining move to restructure its $27 billion in debt.
Chicago-based General Growth Properties, which has a stake in more than 200 malls in 44 states, said shoppers at its malls will not be affected by its bankruptcy filing.
"It's business as usual. Our shoppers won't notice any difference," said Mike Ruddy, general manager of the 30-year-old Valley Hills Mall on U.S. 70, SE.
The company operates five properties in North Carolina, including The Streets at Southpoint in Durham, Four Seasons Town Centre in Greensboro, The Bridges at Mint Hill near Charlotte and Carolina Place in Pineville.
Thursday's bankruptcy filing came after General Growth 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 move had been widely anticipated since autumn, when the company warned it might have to seek bankruptcy protection if it didn't get lenders to rework its debt terms.
"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.
Chapter 11 protection typically allows a company to hold off creditors and operate as normal while it develops a financial reorganization plan.
The company had about $29.6 billion in assets and more than $27 billion in liabilities as of Dec. 31, according to documents filed with the U.S. Bankruptcy Court in the Southern District of New York.
General Growth said it intends to reorganize with the aim of cutting its corporate debt and extending the terms of its mortgage maturities. It also said it will continue operating all of its shopping centers during the bankruptcy process.
The company said shoppers at its malls will not be affected by its decision to file for bankruptcy protection.
"Our restructuring will be invisible to the customers who visit our properties every day,'' Thomas H. Nolan Jr., president and chief operating officer, said in a statement.
General Growth stock closed Thursday at $1.05 a share, unchanged from its opening price. The company's stock peaked at more than $60 per share early in 2007.
Valley Hills Mall attracts about 8.5 million people each year. The mall attracts regular customers from six counties.
A major renovation that took place from 1999 to 2001 included 30,000 square feet of additional gross leasing area for new retail, leading to a new Dillard's; a 30,000-square-foot food court with more than 600 seats; and a 28-foot antique carousel.
Valley Hills has about 90 specialty stores and carts, 11 food court retailers, a sit-down restaurant, and four department stores.
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