Big US mall operator files for bankrutpcy

WASHINGTON: General Growth Properties, operator of some 200 US shopping malls, filed Thursday for bankruptcy protection, saying "broken credit markets" made it impossible to otherwise restructure its debt.

The bankruptcy of one of the largest mall owners comes amid a deep slump in residential real estate that some fears is spreading to commercial sector amid a severe recession.

The Chicago-based company said day-to-day operations and of its shopping centers and other properties will continue as usual as it seeks to reorganize under chapter 11 of the bankruptcy code filed in federal court in New York.

"The company intends to work with its constituencies to emerge from bankruptcy as quickly as possible while executing on a plan of reorganization that preserves the company's integrated, national business operations," a company statement said.

"The decision to pursue reorganization under chapter 11 came after extensive efforts to refinance or extend maturing debt outside of chapter 11. Over many months, the company has endeavored to negotiate with its unsecured and secured creditors to obtain the time needed to develop a long-term solution to the credit crisis facing the company."

General Growth said it has received a commitment for financing in bankruptcy of some 375 million dollars from Pershing Square Capital Management to allow it to operate during the bankruptcy process.

"Our core business remains sound and is performing well with stable cash flows," said chief executive Adam Metz.

"We believe that chapter 11 is the best process for restructuring maturing mortgage loans, reducing the company's corporate debt, and establishing a sustainable, long-term capital structure for the company. While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of chapter 11."