PREIT, owner of the Springfield Mall and other regional malls, is staring at $1.1 billion in debt and has voluntarily filed for Chapter 11 bankruptcy protection for the second time in nearly three years, writes Paul Schwedelson for the Philadelphia Business Journal.
The filing in the U.S. Bankruptcy Court for the District of Delaware includes a restructuring deal with PREIT’s lenders.
If the court approves the plan, the company will go private and receive additional funding from investors. Preferred and common shares of PREIT would be canceled, and $10 million distributed among existing shareholders.
“The [bankruptcy] filing will ensure that PREIT can continue all business operations without interruption while it obtains necessary approvals of its financial restructuring,” PREIT stated in a release Monday morning. “In advance of the filing, the company executed a Restructuring Support Agreement with 100 percent of its first and second lien lenders.”
It is expected to emerge from bankruptcy in early February with $880 million of its debt reduced and a new debt maturity schedule in place.
PREIT CEO Joseph Coradino said in a statement that unusual economic conditions, such as inflation and rising interest rates, have limited the company’s options regarding its debt obligations.
Find out more about PREIT’s bankruptcy filing in the Philadelphia Business Journal.