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Simon competitor General Growth files reorganization plan

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Mall owner General Growth Properties Inc. said Tuesday that it filed a proposed reorganization plan with a federal bankruptcy court and expects to emerge from Chapter 11 protection this fall as two separate companies.

The real estate investment trust filed the nation's largest real estate bankruptcy case in U.S. history 15 months ago. At the time, it owned about 200 shopping malls, including Faneuil Hall in Boston, the Glendale Galleria in Southern California and the South Street Seaport in Manhattan.

On Tuesday, the Chicago company said it expects to emerge in October with a "significantly improved balance sheet and substantially less debt." So far, General Growth says it's restructured about $15 billion in project-level debt. It plans to satisfy debt and other claims in full and provide a "substantial recovery" to shareholders. It also plans to have between $7 billion and $8.5 billion of new funds.

The company on Monday said it is getting a $500 million infusion from a Texas teachers' pension fund. The Teacher Retirement System of Texas will receive shares priced at $10.25 per share in the reorganized company in exchange for the cash.

When it exits Chapter 11 protection, shareholders will own stock in both General Growth and the newly formed Spinco.

General Growth expects to come out of bankruptcy court with 180 properties, making it the second-largest shopping mall owner behind Indianapolis-based rival Simon Property Group Inc., which decided this spring to drop its efforts to acquire the struggling company. General Growth earlier this week agreed to turn over management responsibility for 18 malls in 11 states to Jones Lang LaSalle.

Spinco will manage a diverse group of properties with little debt that have development potential. Its holdings also include the company's master-planned communities and mixed-use development projects.

"I am confident that both companies will be extremely well-positioned to succeed," General Growth CEO Adam Metz said in a statement.

A judge is expected to begin considering the plan in mid-August.

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  1. With Pence running the ship good luck with a new government building on the site. He does everything on the cheap except unnecessary roads line a new beltway( like we need that). Things like state of the art office buildings and light rail will never be seen as an asset to these types. They don't get that these are the things that help a city prosper.

  2. Does the $100,000,000,000 include salaries for members of Congress?

  3. "But that doesn't change how the piece plays to most of the people who will see it." If it stands out so little during the day as you seem to suggest maybe most of the people who actually see it will be those present when it is dark enough to experience its full effects.

  4. That's the mentality of most retail marketers. In this case Leo was asked to build the brand. HHG then had a bad sales quarter and rather than stay the course, now want to go back to the schlock that Zimmerman provides (at a considerable cut in price.) And while HHG salesmen are, by far, the pushiest salesmen I have ever experienced, I believe they are NOT paid on commission. But that doesn't mean they aren't trained to be aggressive.

  5. The reason HHG's sales team hits you from the moment you walk through the door is the same reason car salesmen do the same thing: Commission. HHG's folks are paid by commission they and need to hit sales targets or get cut, while BB does not. The sales figures are aggressive, so turnover rate is high. Electronics are the largest commission earners along with non-needed warranties, service plans etc, known in the industry as 'cheese'. The wholesale base price is listed on the cryptic price tag in the string of numbers near the bar code. Know how to decipher it and you get things at cost, with little to no commission to the sales persons. Whether or not this is fair, is more of a moral question than a financial one.

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