San Jose Bankruptcy Attorney comments on the efforts of Simon Property Group to purchase some assets of General Growth Properties Inc. as it goes through a Chapter 11 bankruptcy reorganization.
San Jose Bankruptcy Attorney comments on the efforts of Simon Property Group to purchase some assets of General Growth Properties Inc. as it goes through a Chapter 11 bankruptcy reorganization.
Two of the largest shopping mall owners in the United States may be working on a deal to allow the bankrupt General Growth Properties to sell some of its properties to Simon Property Group. General Growth filed for Chapter 11 bankruptcy protection in April and has until February, 2010 to file a bankruptcy reorganization plan with the bankruptcy court.
While its biggest rival is in bankruptcy proceedings, Simon has been raising capital and has more than $4 billion in cash available for acquisitions. While Simon may be a logical choice to purchase some of General Growth’s more than 200 properties in 44 states, Simon has no standing before the bankruptcy court. Simon will not be able to actively pursue the purchases until Simon is much farther into the bankruptcy process and has a plan to refinance its secured and unsecured debt, and has a plan to deal with the claims on its equity.
The Chapter 11 bankruptcy process can be very quick, as in the recent case of General Motors. It can also take a considerable amount of time as creditor’s committees and bankrupt companies engage in intense negotiations over debt, equity, asset sales and who will manage the reorganized company. In some cases, the creditor’s committee can demand a new management team be put in place, and it may be headed by executives from the creditor companies.
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