Updated at 10:18
Updated at 11:11
We all knew it was likely. Now it's happened. The biggest real estate bankruptcy is now official. Blaming the broken financial markets, General Growth made the release that hit the company's Web site early this morning.official with a
You can read its SEC filing here. And you can view its bankruptcy filing below.Publish at Scribd or explore others: Finance Business & Law general growth prope
Update 1: A factbox on Reuters says General Growth is the 11th largest bankruptcy in U.S. history.
The following is a list of the largest U.S. bankruptcies
since 1980, according to court records and the website
COMPANY/YEAR TOTAL ASSETS
Lehman Brothers Holdings Inc (2008) $639,000,000,000 *
WorldCom Inc (2002) 103,914,000,000
Enron Corp (2001) 63,392,000,000
Conseco Inc (2002) 61,392,000,000
Texaco Inc (1987) 35,892,000,000
Financial Corp of America (1988) 33,864,000,000
Refco Inc (2005) 33,333,172,000
Washington Mutual Inc (2008) 32,900,000,000 *
Global Crossing Ltd (2002) 30,185,000,000
Pacific Gas and Electric Co (2001) 29,770,000,000
General Growth Properties Inc (2009) 29,560,000,000 *
Lyondell Chemical Co (2009) 27,392,000,000
UAL Corp (2002) 25,197,000,000
Delta Air Lines Inc (2005) 21,801,000,000
Adelphia Communications Corp (2002) 21,499,000,000
MCorp (1989) 20,228,000,000
Mirant Corp (2003) 19,415,000,000
Delphi Corp (2005) 16,593,000,000
* - from court documents
What can we expect now? This is precisely the question we tackled in our February cover story which surveyed bankruptcy experts and looked at how a REIT bankruptcy might unfold.
Bankruptcy experts, however, say that many of the worries may be unfounded. The sector may not have been tested by a big bankruptcy yet, but enough is known about how the companies are structured and how a bankruptcy proceeds that experts think the industry should emerge fine, even from a series of bankruptcies. Further, there is reason to believe that because REITs control a tangible base of assets through large portfolios of real estate, these firms may be more likely to survive bankruptcies than other companies that's value is harder to pin down or could be subject to liquidation.
We'll have more--much more--on this story as new details emerge. For now, here are links to some of the key write-ups so far.
Update 2: General Growth has set up a portion on its site dedicated to the restructuring. It includes links to claim lists and court documents, and complete lists of filing entities, filing properties, nonfiling properties and a FAQ.
Update 3: One thing to keep an eye on today is how other regional mall REIT stocks fare given this news. For example, I just spotted this post which takes GGP's bankruptcy as a jumping off point for an argument that investors should short REIT shares. As I write this, here is how the other regional mall REITs are looking. Currently, the other major regional mall REITs are down between 6 percent and 1 percent--that's not too sharp a move. The Dow and S&P 500 are basically flat on the day.
Past links and stories: