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Mall Operator Washington Prime Files Chapter 11 Bankruptcy

Mall operator Washington Prime filed Chapter 11, saying the pandemic 'has created significant challenges for many companies.'

Washington Prime  (WPG) - Get Report was falling Monday after the real estate investment trust, which operates about 100 malls, said it filed under Chapter 11 of federal bankruptcy law due to the impact of the COVID-19 pandemic shutdown.

Shares of the Columbus, Ohio, company at last check were down 42% at $2.83.

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The pandemic, the company said, "has created significant challenges for many companies, including Washington Prime Group."

Washington Prime estimated its assets at about $4 billion with debt of almost $3.5 billion.

The company said will continue operating under its restructuring agreement. It secured a debtor-in-possession loan of about $100 million.

Washington Prime said it filed for Chapter 11 after executing a restructuring support agreement with creditors, led by SVPGlobal, the Greenwich, Conn., private-equity firm. The creditors hold about 73% of the face amount of the company’s secured corporate debt outstanding and 67% of the face amount of its unsecured notes.

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"During the financial restructuring, we will continue to work toward maximizing the value of our assets and our operating infrastructure," Lou Conforti, Washington Prime's chief executive and a director, said in a statement. 

"The company expects operations to continue in the ordinary course."

Washington Prime, which employs more than 700, was formed in 2014 following a spinoff from mall giant Simon Property Group.  (SPG) - Get Report

Mall owners CBL & Associates Properties  (CBL) - Get Report and Pennsylvania Real Estate Investment Trust  (PEI) - Get Report filed for bankruptcy in November. 

J.C. Penney, one of CBL's biggest renters, earlier in the year had filed for Chapter 11 protection.

Prior to the pandemic, malls had seen foot traffic decline. But the societal shutdown stemming from the pandemic closed the malls and sharply increased online shopping.