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(Bloomberg) — The Washington Prime Group, a real estate investment trust that operates malls and closed malls across the United States, has filed for bankruptcy after the Covid-19 pandemic curtailed in-person shopping.
A Chapter 11 filing in Houston will allow Washington Prime to continue working while it seeks to enforce the restructuring agreement it has reached with some of its creditors, according to a board decision filed with the bankruptcy petition. The company, which has estimated $4 billion in assets and $3.5 billion in debt, has secured a loan of up to $100 million to a debtor debtor that will help fund operations during court proceedings.
The Columbus, Ohio-based company that operates about 100 malls saw its bonds deteriorate in the stricken area in 2020 as rental pools dried up and tenants filed for bankruptcy or went out of business. It began negotiating with its creditors last year and skipped a $23 million bond interest payment in February. Creditors were extending the patience deal amid the talks.
Washington Prime said it lifted Chapter 11 after implementing a restructuring support agreement with creditors who own about 73% of the principal outstanding debt of secured companies and 67% of unsecured bonds. The company aims to shrink its balance sheet by about $950 million, according to a company statement.
Bloomberg News previously reported that the Washington Prime Minister was considering bankruptcy while talks faltered.
The case is Washington Prime Group Inc., 21-31948, US Bankruptcy Court for the South Texas District (Houston).
(Adds details of the restructuring agreement in the fourth paragraph).
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