The company says it will continue operating while undergoing restructuring.
Two owners of a total of 130 shopping malls in the United States have filed for bankruptcy. CBL Properties and PREIT filed for Chapter 11 on Sunday, according to CNN Business. PREIT is the owner of the FSK Mall in Frederick and the Valley Mall in Hagerstown.
Both companies say they will continue to operate while undergoing restructuring.
The two have warned their conditions were shaky because some of their largest tenants have also filed for bankruptcy. One of them being JC Penny which has a store at the FSK Mall.
CNN Business reports that PREIT, which is based in Pennsylvania, says it voluntarily filed for Chapter 11 bankruptcy. The company says its pre-packaged financial plan will ensure that $150-million in funding will “recapitalized the company’s debt maturity schedule.” The plan has overwhelming support from its lenders and is looking to quickly emerge from the bankruptcy process, CNN Business reports.
CBL says in its bankruptcy filing that it has estimated assets and liabilities between $1-billion to $10-billion. The company, which is based in Tennessee, says uncollected rents from August from retailers, declining customer traffic and a deb of up to $1-billion were factors in its decision to file for bankruptcy. It is the larger of the two shopping mall owners to file this week, reports CNN Business.
CBL owns around 100 malls, mostly in the US southeast and Midwest.
2020 has been a difficult year for retailers and mall owners. In the spring, many were closed due to the COVID-19 as they were considered non-essential businesses. Many of their customers switched to on-line shopping. In addition, a number of their anchor stores filed for bankruptcy during the pandemic.
By Kevin McManus