Updated at 9:51
Updated at 10:18
Updated at 11:11
We all knew it was likely. Now it’s happened. The biggest real estate bankruptcy is now official. Blaming the broken financial markets, General Growth made the news official with a release that hit the company’s Web site early this morning.
You can read its SEC filing here. And you can view its bankruptcy filing below.
General Growth Properties’ Bankruptcy Filing
Update 1: A factbox on Reuters says General Growth is the 11th largest bankruptcy in U.S. history.
The following is a list of the largest U.S. bankruptcies
since 1980, according to court records and the website
BankruptcyData.com:
COMPANY/YEAR TOTAL ASSETS
Lehman Brothers Holdings Inc (2008) $639,000,000,000 *
WorldCom Inc (2002) 103,914,000,000
Enron Corp (2001) 63,392,000,000
Conseco Inc (2002) 61,392,000,000
Texaco Inc (1987) 35,892,000,000
Financial Corp of America (1988) 33,864,000,000
Refco Inc (2005) 33,333,172,000
Washington Mutual Inc (2008) 32,900,000,000 *
Global Crossing Ltd (2002) 30,185,000,000
Pacific Gas and Electric Co (2001) 29,770,000,000
General Growth Properties Inc (2009) 29,560,000,000 *
Lyondell Chemical Co (2009) 27,392,000,000
UAL Corp (2002) 25,197,000,000
Delta Air Lines Inc (2005) 21,801,000,000
Adelphia Communications Corp (2002) 21,499,000,000
MCorp (1989) 20,228,000,000
Mirant Corp (2003) 19,415,000,000
Delphi Corp (2005) 16,593,000,000
* – from court documents
What can we expect now? This is precisely the question we tackled in our February cover story which surveyed bankruptcy experts and looked at how a REIT bankruptcy might unfold.
Bankruptcy experts, however, say that many of the worries may be unfounded. The sector may not have been tested by a big bankruptcy yet, but enough is known about how the companies are structured and how a bankruptcy proceeds that experts think the industry should emerge fine, even from a series of bankruptcies. Further, there is reason to believe that because REITs control a tangible base of assets through large portfolios of real estate, these firms may be more likely to survive bankruptcies than other companies that’s value is harder to pin down or could be subject to liquidation.
We’ll have more–much more–on this story as new details emerge. For now, here are links to some of the key write-ups so far.
- Bloomberg, “General Growth Seeks Chapter 11 Bankruptcy Protection”
- Reuters, “General Growth files for bankruptcy protection”
- New York Times’s DealBook blog, General Growth Properties Files for Bankruptcy
- Financial Times, General Growth files for bankruptcy protection
- Wall Street Journal, Mall Titan Enters Chapter 11
- Daily Finance, As General Growth goes into Chapter 11, banks sweat
- Associated Press, Mall operator files for bankruptcy protection
- Washington Post, Mall Operator General Growth Files for Bankruptcy Protection
- April 15, Rouse CDS Worth 28.25% of the Debt They Insure
- April 14, GGP Bondholders Seek Lawsuit
- April 6, 2009, Strange Action on GGP Stock
- March 31, 2009, GGP Fails to Convince Bondholders, But Avoiding Bankruptcy For Now
- March 23, 2009, GGP Pushes for Another Extension
- March 20, 2009, Citigroup Moves to Foreclose on GGP Mall
- March 20, 2009, GGP’s Lenders Waive Default; REIT Asks for Further Forbearance
- March 10, 2009, GGP Asks for More Time
- March 3, 2009, GGP Reportedly Getting Bids for Properties
- Feb. 24, 2009, GGP Posts Gains But Drops Earnings Call and Estimates
- Feb. 20, 2009, GGP Bankruptcy Scenario
- Feb. 18, 2009, GGP Misses Payments
- Feb. 2, 2009, General Growth Gets Another Extension
- Jan. 5, 2009, GGP Switches Bankruptcy Advisors
- Dec. 30, 2008, GGP Signs Forebearance Agreement
- Dec. 19, 2008, GGP Puts Centers on the Block
- Dec. 18, 2008, General Growth Extension Comes Through
- Dec. 15, 2008, GGP “Continuing its Discussions with Lenders”
- Dec. 14, 2008, Breaking: GGP Refinances
- Dec. 5, 2008, Citi Plays Hardball With GGP
- Dec. 3, 2008, Centro, GGP Find Ways to Hang On
- Dec. 1, 2008, GGP Gets Two Week Extension
- Nov. 25, 2008, Ackman Builds Stake in GGP
- Nov. 20, 2008, General Growth Hires Bankruptcy Advisor
- Nov. 17, 2008, General Growth Downgraded; Feldman to Stop Filing Public Reports
- Nov. 12, 2008, General Growth Roundup
- Nov. 11, 2008, General Growth Warns of Default
- Nov. 5, 2008, GGP, Kimco Fall After Cutting Forecasts
- Nov. 2, 2008, General Growth “Almost Literally Worth Nothing”
- Oct. 17, 2008, Management Changes at GGP
- Oct. 15, 2008, Margin Calls Hit Two More Retail REITs
- Oct. 7, 2008, General Growth Near Bankruptcy?
- Oct. 3, 2008, General Growth CFO Steps Down; Company Suspends Dividend
- Oct. 2, 2008 GGP Under Fire for Inclusion on Short-Sell Ban List
- Oct. 1, 2008, Could General Growth Be Sold?
- Sept. 23, 2008, Short Selling Banned on General Growth
- Sept. 22, 2008, General Growth Strikes Back
- Sept. 16, 2008, General Growth Offers More Recourse
- Aug. 12, 2008, Another Look at GGP’s Debt
- Aug. 6, 2008, Analysis of GGP’s Debt
- July 25, 2008, Stories With Bigger Implications?
- July 14, 2008, GGP Lines Up New Financing
- April 16, 2008, GGP’s Growing Debt Problem
Update 2: General Growth has set up a portion on its site dedicated to the restructuring. It includes links to claim lists and court documents, and complete lists of filing entities, filing properties, nonfiling properties and a FAQ.
Update 3: One thing to keep an eye on today is how other regional mall REIT stocks fare given this news. For example, I just spotted this post which takes GGP’s bankruptcy as a jumping off point for an argument that investors should short REIT shares. As I write this, here is how the other regional mall REITs are looking. Currently, the other major regional mall REITs are down between 6 percent and 1 percent–that’s not too sharp a move. The Dow and S&P 500 are basically flat on the day.
Past links and stories: