Owner of area malls files for bankruptcy
Filing is part of a financial restructuring of the company
PREIT’S properties include Exton Square Mall, Plymouth Meeting Mall, Willow Grove Park Mall and Springfield Mall.
PHILADELPHIA » Retail property operator PREIT (Pennsylvania Real Estate Investment Trust) has filed a voluntary Chapter 11 petition in the United States Bankruptcy Court for the District of Delaware. The company calls the filing a “next step” in executing its prepackaged financial restructuring plan outlined in mid-October, according to a press release announcing the filing.
PREIT’S properties include: Exton Square Mall in West Whiteland, Chester County; Plymouth Meeting Mall in Plymouth Meeting, Montgomery County; Willow Grove Park Mall in Willow Grove, Montgomery County; and Springfield Mall in Springfield, Delaware County.
In October, PREIT announced it had entered into a restructuring support agreement with its bank lenders. The banks have committed to provide an additional $150 million to recapitalize the business and extend the company’s debt maturity schedule, supporting PREIT’s operations and execution of its strategic priorities, according to the release. PREIT had sought acceptances from the lenders for the plan, receiving support from 95% of its creditors.
At the time of the restructuring agreement announcement, PREIT CEO Joseph F. Coradino said the company had been taking steps to enhance the financial and operation health of the business, “long before the COVID-19 pandemic hit.” Those steps have included: asset sales, anchor repositioning and redevelopment, as well as diversifying the tenant base and simultaneously improving the company’s underlying tenant credit profile.
The Chapter 11 filing, announced on Sunday, is expected to have no impact on business operations while PREIT obtains the required approvals of the restructuring plan.
“We are pleased to be moving forward with strengthening the company’s balance sheet and positioning it for long-term success through our prepackaged plan. We are grateful for the significant support we have received from a substantial majority of our lenders, which we expect will enable us to complete our financial restructuring on an expedited basis,” Coradino said in the release.
He added that the company remains committed to delivering “top-tier experiences and improving our portfolio.” He anticipates the company emerging from the process quickly, “as a financially stronger company.”
PREIT will pay all vendors, suppliers and employees during the course of the Chapter 11. In addition, under the terms of the prepackaged plan, which will also be subject to court approval, the prepetition claims of suppliers and other trade creditors and business partners will not be impacted. The financial restructuring is not expected to have any impact on the company’s shareholders, and PREIT common and preferred shares are expected to continue to trade in the “normal course,” according to the release.
Headquartered in Philadelphia, PREIT owns and manages retail shopping malls in 12 states in the eastern U.S. with concentration in the Mid-Atlantic and Greater Philadelphia region.
Additional information, including court documents and information about the court-supervised process, is available on PREIT’s restructuring website through PREIT’s claims agent, Prime Clerk at https://cases. primeclerk.com/PREIT.