Posted on 04/16/2009 7:46:15 AM PDT by SeekAndFind
General Growth Properties Inc. has filed for Chapter 11 federal bankruptcy protection to reorganize.
General Growth listed $29.5 billion in total assets and about $27.3 billion of debts in its bankruptcy petition, making it the largest real estate bankruptcy in U.S. history.
Chicago-based General Growth (NYSE: GGP), whose shopping mall holdings include Coronado Center, New Mexico's largest enclosed mall, said in an announcement Thursday that it had sought bankruptcy protection only after being unable to refinance or extend maturing debt. The company said all day-to-day operations and business of its shopping malls would continue as usual while it reorganizes.
General Growth owns or manages over 200 malls, several master planned communities and a collection of commercial office buildings.
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Tucker Echols of the Washington Business Journal, an affiliated publication, compiled this report.
Love to know what the banks and other commercial real estate lending entities are doing with all those billions and trillions we/Obama gave them. They’re certainly not lending it to anyone.
Old Testament, Mr. Mayor, real wrath-of-God type stuff. Fire and brimstone coming down from the sky. Rivers and seas boiling.
Dr. Egon Spengler: Forty years of darkness. Earthquakes, volcanoes...
Winston Zeddemore: The dead rising from the grave.
Dr. Peter Venkman: Human sacrifice, dogs and cats living together - mass hysteria.
I suspect that this is just the tip of the iceberg and that the predicted next round of real estate failures is beginning, this time in the commercial section.
Isn’t that windbag, Tom Friedman, attached to the family via marriage?
This is the company that owns such iconic shopping centers as Boston’s Faneuil Hall and the South Street Seaport in New York City.
The bankruptcy may remake the nation’s mall business and allow General Growth competitors including Simon Property Group Inc. to buy properties and strength its position as the No. 1 mall owner.
I think Simon’s going to be able to pick up some of these assets on the cheap.
General Growth’s filing is the beginning of the distress cycle and may lead other companies to fail. This bankruptcy will drive down the values of mall assets in the United States. It’s going to put, I believe, more supply on the market than can be absorbed by investors.
This company has long been the poster child of too much debt. But then the USA has been living beyond its means for too long. Witness the growth in personal debt the past decade and the growth of GOVERNMENT DEBT !! How long will this be sustainable ?
No growth general or otherwise then.
He is such a bore, I’m betting that this little embarrassment wont slow him down one bit. We need him, dontchya know?
They are simply over-leveraged. The banks won’t relend to support them because they anticipate that their income will fall and not support the new loans. They didn’t plan for any recession and their properties will be sold off until they can get re-leveraged.
It must be the leases being abandoned.
Are they changing their name to “General Stagnation”??
Friedman's wife, Ann, is a graduate of Stanford University and the London School of Economics.[2] Her father, Matthew Bucksbaum, was the chairman of the board of General Growth Properties, the real estate development group that he co-founded with his brother in 1954. The Bucksbaums helped pioneer the development of shopping centers in the United States.[3] As of 2007, Forbes estimated the Bucksbaum family's assets at $4.1 billion, including about 18.6 million square meters of mall space.[4] In late 2008 the value of the heavily leveraged firm plummeted and the company was threatened with bankruptcy; Ann's brother John resigned as CEO, ending family executive control of General Growth Properties. In its February 2009 issue, Harper's Magazine (based on information from the U.S. Securities and Exchange Commission) estimated that the value of the Bucksbaum family fortune shrank by 97 percent since December 2007. [5] The family's trust declined in value from $3.6 billion to $25 million.[6] On April 16th 2009, the company filed for Chapter 11 bankruptcy, after failing to reach a deal with its creditors. [7]
$3.6B to $25M. Ouch. That’s gotta hurt. Young Tom might have to really live on the NYT salary.
This is actually an opportunity for vulture traders out there to make a fortune (based on the history of past bankrupcy plays in the stock market ).
I do not believe this stock will tank very much during the next few weeks. There was a lot of volume, over 23M, closing at .60 a share.
Let’s also consider what happened to the bonds today. Pre-BK bonds were trading at .29 on the dollar, after the bk announcement the bonds are trading at .375 on the dollar. Thats a 30% improvement after BK announced. Hardly a representation of a worthless company!!!
As to some of the posts about FUND MANAGER, Ackman, who owns a quarter of the shares, and his intentions.
1. He is a common stock holder owning 25%
2. He bought a lot of bonds on the cheap.
3. He is providing DIP to the company
4. He now has a seat on the board and for any and all negotiations.
5. He has publicaly stated that he supports management and believes the company is way under valued.
These are not the actions of a man trying to destroy the company.
The Bucksbaum and Fidelity own 35% of the stock. Keep in mind that the Bucksbaums stock was worth $4B, now worth $100M. Both Bucksbaum and Fidelity will be fighting to the death to preserve shareholder equity.
The company has a 92.5% occupancy level, the highest since going public and the malls have good tenants PAYING rent. Before you believe the trash talk about the company having @#$%y malls, go see one. I am in Texas and all of there properties are premium, full and successfull. The replacement cost alone of the malls in sticks and bricks is higher that the share price of $1.05 pre bankrupcy.
This stock is not for everyone and does have risk. The upside is huge and if you are a independent thinker, think about. Don’t be lead by pumpers dumping on the company.
This will be a stock that will be talked about for a long time, its a real company, with good cash flows and beautiful properties.
Savy traders will go Long and Strong with GGP!!!!!
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