The owner of Louisville’s Oxmoor Center and Mall St. Matthews is no longer negotiating with its bondholders for a reprieve of debt payments.
General Growth Properties owns some two hundred malls nationwide and two weeks ago missed a payment deadline on $395 million in bonds.
Company officials declined to comment on the air, but say the company is continuing talks with other lenders and bondholders.
Louisville commercial real estate attorney Barry Hines, who’s not connected with the company or its bondholders, says General Growth’s financial troubles are caused more by the difficulty in the financial market than a drop in consumer spending.
“For the most part, my understanding is the underlying income stream from these malls is healthy and is sufficient to service the debt,” says Hines. “Their big problem is they can’t find enough money out there in the debt marketplace from lenders who are actively making loans in order to repay the debt that is blooming.”
Hines says the company can file for Chapter 11 bankruptcy and restructure its debt, but it may be forced into Chapter 7, which would lead to the liquidation of property.