It's not completely clear why General Growth Properties fired Sidley
Austin LLP as its debtor counsel-in-waiting and asked Weil, Gotshal
& Manges LLP to take over.
You'd
think that GGP would be spending more of its time negotiating with its
lenders in order to avoid bankruptcy, and less time picking out who
will represent it in a bankruptcy filing. But maybe all the retailers
filing for bankruptcy nowadays has it spooked about having fewer and
fewer tenants in its malls.
Chicago-based GGP, which owns 200 million square feet of retail space
and more than 24,000 retail stores nationwide, is certainly running out
of time. It has until Jan. 30 to refinance or put another forbearance
agreement in place for $2.6 billion in loans from Eurohypo AG and until
Feb. 12 to do the same for $900 million in loans from Deutsche Bank
Trust Co., documents filed with the Securities and Exchange Commission
said.
According to a Jan. 5 Wall Street Journal article,
the company is "struggling to restructure or postpone payment on $27
billion in debt as large installments of it come due in the coming
months."
While the company hasn't yet filed for bankruptcy, it "has warned that
it might need to do so if it can't sell assets or win agreement on
deadline extensions with lenders," the WSJ reported.
The GGP situation is starting to become a replay of the one involving
Linens Holding Co. Months of speculation preceded Linens' bankruptcy
filing. So much so that when the retailer finally did file, it was
anticlimatic. - Jamie Mason
Changing
bankruptcy counsel is not completely unusual, but changing it when you
haven't even filed for bankruptcy yet is. Troubled mall owner General
Growth Properties Inc. did just that recently.
