General Growth struck a deal with Canada’s Brookfield Asset Management that will help the company exit Chapter 11 quickly.
Last April, General Growth made headlines for being part of the largest real estate bankruptcy case in U.S. History. General Growth is the second-largest shopping mall operator in the nation, so that’s why it owns so much real estate. The company owns or operates 200 malls in 44 states across the country. The company is making headlines now because it struck a deal with Canada’s Brookfield Management Inc. that will help the company rebound from Chapter 11 bankruptcy protection.
Before its bankruptcy, the company ran up $27 billion in debt. Since then, the company has been able to restructure $13 billion in debt, but it is still struggling to turn things around.
Last week, a company called Simon Property Group Inc. made a takeover bid that General Growth denied due to the bid being too low. Apparently General Growth likes the new bid from Brookfield Management, so the companies want to proceed.
In the pact, a new company would be spun off that would hold assets that aren’t producing income. Then the company could take the revenue it produced from other sources to pay off $7 billion in debt. This new plan would be of a significant value to the company’s shareholders.
Although the new plan sounds like a good idea to most, it still has some hurdles. A bankruptcy judge has to approve the plan, and Simon says that the plan carriers risks that its plan doesn’t have.
Most likely this quandary will be solved soon, but what happens from here is still up in the air. One thing is for certain though; it is good that bankruptcy was an option for General Growth. Without bankruptcy protection, the company would not have been able to continue operating. There was just too much debt for the company to handle. Now, the company will be able to emerge from protection with was less debt, and the debt that remains will be more favorably structured.
If you are struggling in your personal financial situation, take a lesson from General Growth’s story. You can wipe out and restructure debts just like companies do every day. You’ll be able to move on with your life with a fresh financial start. If you would like to find out more, don’t hesitate to contact a Dallas bankruptcy attorney today.