- Mall owner Washington Prime Group has filed for Chapter 11 bankruptcy protection.
- It operates roughly 100 US malls and says business will continue as usual during the proceedings.
- The company says COVID-19 presented “significant challenges” that made the filing necessary.
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Washington Prime Group, a mall owner operating roughly 100 locations across the US, has filed for Chapter 11 bankruptcy protection.
The company will restructure its debts after COVID-19 caused business at many shopping centers to take a nosedive.
“The COVID-19 pandemic has created significant challenges for many companies, including Washington Prime Group, making a Chapter 11 filing necessary to reduce the Company’s outstanding indebtedness,” the company said in a press release announcing the filing on Sunday.
Columbus, Ohio-based Washington Prime Group had total assets of just over $4 billion and total debts of nearly $3.5 billion as of the end of March, according to a filing in the United States Bankruptcy Court for the Southern District of Texas.
Washington Prime Group said in the release that business will continue as usual during the proceedings, thanks to $100 million in debtor-in-possession financing.
The company is executing a restructuring plan that has support from creditors holding roughly 73% of its secured corporate debt and 67% of its unsecured notes, according to the press release. Washington Prime Group says the plan will allow the company to “substantially deleverage its balance sheet and strengthen its business and operations going forward, either through a full equitization of the Company’s unsecured notes or an alternative value-maximizing transaction that would repay, in full in cash, all of the Company’s corporate-level debt.”
The pandemic exacerbated business woes for shopping centers, but malls were already facing challenges in recent years as much consumer focus continued to shift away from brick-and-mortar stores in favor of e-commerce. Washington Prime Group CEO Lou Conforti told Insider last year that the industry is “very passive,” saying it would need to adapt to serve additional purposes in order to survive.