General Growth Properties stands at death's door

Posted Feb 4th 2009 1:20PM by Zac Bissonnette
Filed under: Bad News, Housing

General Growth Properties (NYSE: GGP) could be nearing the end of the line.

The company has been unable to work out an extension of a $225 million loan arranged by Goldman Sachs (NYSE: GS). The payment deadline passed on Monday, and so far there has been no announcement of an extension. According (subscription required) to The Wall Street Journal, "Goldman has at least one unidentified partner in the loan who has balked at providing an extension, according to people familiar with the talks."

If Goldman elects to foreclose on the real estate collateralizing the loan, it could trigger a wave of cross-defaults that would leave the company with no choice but to file for bankruptcy protection.

A General Growth bankruptcy would be one of the largest in real estate history, and could wreak havoc on the already beaten up commercial real estate market.

Shares of General Growth are relatively unchanged in trading today as investors wait around for the big news. In the next few days General Growth will announce either another reprieve or a bankruptcy filing.

Tags: General Growth Properties, GeneralGrowthProperties, GGP, Housing, inthenews, Real estate, RealEstate

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Reader Comments (Page 1 of 1)

2-04-2009 @ 2:02PM

b t said...

LET EM GO AND GET IT OVER WITH. TO HELL WITH THE GREEDY STOCKHOLDERS. BETTER WORRY ABOUT THE MALLS' EMPLOYEES LOSING THEIR JOBS.

2-04-2009 @ 3:09PM

BHarrison said...

Yes, it is time for these matters to be resolved by the REGULATED Free Market Economy. If they cannot survive on their own with the help of new investors, then they should be forced into bankruptcy. The BIG QUESTION is: "Wehere are the NEW regulationos that Congress should be issuing to instill INTEGRITY in the corporate financial reports and operations . . . Congress STILL has not addressed these problems.