GGP Shakes Up Ranks, Gets Downgraded, Faces Deadline

Here is a trio of General Growth headlines as its next debt deadline rapidly approaches.

The company has shuffled its executive deck

Leaving General Growth this week are Jean Schlemmer, chief development officer; Alex Berman, senior vice president of the mall owner's international division; human-resources chief Judy Herbst; and investor-relations director Tim Goebel. None returned messages seeking comment Thursday. Their departures follow that of Thomas D'Alesandro, General Growth's senior vice president of development, who left Feb. 27.

The changes are the latest implemented by Adam Metz and Thomas Nolan after the former board members took over as General Growth's CEO and president, respectively, last October. Mr. Metz replaced John Bucksbaum, who remains chairman. Mr. Nolan replaced Bob Michaels, who remained as chief operating officer. In another change this week, Mr. Nolan took over as COO from Mr. Michaels, who now is the company's vice chairman handling the mall owner's relationships with retailers.

Meanwhile, Moody's has downgraded GGP's credit rating.

Moody's Investors Service lowered its ratings on debt-laden mall owner General Growth Properties Inc. (GGP) and some of its subsidiaries to C, the last stop before default, after the company let a $395 million bond payment pass without a payment earlier this week.

The nation's second-largest mall owner by number of properties, which is trying to coax its bondholders into a nine-month extension, is hoping holders of the past-due bonds will forgo filing an involuntary bankruptcy petition against it and instead allow it to restructure its $27 billion debt load out of court.

Meanwhile, the company is facing yet another deadline to get an extension from its lender or else file for Chapter 11.

Some of the nicest malls around could be in Chapter 11 within hours, unless parent General Growth Properties Inc. wins another last-minute reprieve from its lenders.

Everybody has heard about toxic assets, those bad loans clogging the nation's financial system. General Growth has the flip side: great assets, drowning in debt.

This Chicago-based real estate giant has stopped paying some of its bills, and has avoided bankruptcy so far only because the lenders have cooperated. But it has billions of dollars in loans coming due, and a deadline Friday for a partial extension. Without it, a costly court-supervised workout may be inevitable.

Past links and stories:

• March 17, 2009, GGP's Lenders Waive Default; REIT Asks for Further Forbearance
• March 10, 2009, GGP Asks for More Time
• March 3, 2009, GGP Reportedly Getting Bids for Properties
• Feb. 24, 2009, GGP Posts Gains But Drops Earnings Call and Estimates
• Feb. 20, 2009, GGP Bankruptcy Scenario
• Feb. 18, 2009, GGP Misses Payments
• Feb. 2, 2009, General Growth Gets Another Extension
• Jan. 5, 2009, GGP Switches Bankruptcy Advisors
• Dec. 30, 2008, GGP Signs Forebearance Agreement
• Dec. 19, 2008, GGP Puts Centers on the Block
• Dec. 18, 2008, General Growth Extension Comes Through
• Dec. 15, 2008, GGP "Continuing its Discussions with Lenders"
• Dec. 14, 2008, Breaking: GGP Refinances
• Dec. 5, 2008, Citi Plays Hardball With GGP
• Dec. 3, 2008, Centro, GGP Find Ways to Hang On
• Dec. 1, 2008, GGP Gets Two Week Extension
• Nov. 25, 2008, Ackman Builds Stake in GGP
• Nov. 20, 2008, General Growth Hires Bankruptcy Advisor
• Nov. 17, 2008, General Growth Downgraded; Feldman to Stop Filing Public Reports
• Nov. 12, 2008, General Growth Roundup
• Nov. 11, 2008, General Growth Warns of Default
• Nov. 5, 2008, GGP, Kimco Fall After Cutting Forecasts
• Nov. 2, 2008, General Growth "Almost Literally Worth Nothing"
• Oct. 17, 2008, Management Changes at GGP
• Oct. 15, 2008, Margin Calls Hit Two More Retail REITs
• Oct. 7, 2008, General Growth Near Bankruptcy?
• Oct. 3, 2008, General Growth CFO Steps Down; Company Suspends Dividend
• Oct. 2, 2008 GGP Under Fire for Inclusion on Short-Sell Ban List
• Oct. 1, 2008, Could General Growth Be Sold?
• Sept. 23, 2008, Short Selling Banned on General Growth
• Sept. 22, 2008, General Growth Strikes Back
• Sept. 16, 2008, General Growth Offers More Recourse
• Aug. 12, 2008, Another Look at GGP's Debt
• Aug. 6, 2008, Analysis of GGP's Debt
• July 25, 2008, Stories With Bigger Implications?
• July 14, 2008, GGP Lines Up New Financing
• April 16, 2008, GGP's Growing Debt Problem