Updated from 2:43 a.m. EDTGeneral Growth Properties ( GGP), the owner of malls, confirmed it is seeking bankruptcy protection. In a press release Thursday, General Growth said it and about 158 regional shopping centers it owns and certain other subsidiaries also have filed for protection. "The company intends to work with its constituencies to emerge from bankruptcy as quickly as possible while executing on a plan of reorganization that preserves the company's integrated, national business operations," General Growth said. The company said it will continue to explore strategic alternatives and search the markets for available sources of capital while in bankruptcy. General Growth said Thursday it received a commitment for a debtor-in-possession financing facility of about $375 million from Pershing Square Capital. General Growth's board decided to file in U.S. Bankruptcy Court in New York on Wednesday after efforts to piece together a plan for an out-of-court restructuring with creditors failed to go anywhere, the Wall Street Journal reported, citing people familiar with the talks. General Growth confirmed the report. The Journal reports the filing is one of the largest real-estate failures in U.S. history, capping a months-long effort to juggle $27 billion debt the company acquired after making a series of acquisitions. The filing includes General Growth, its Rouse subsidiary and most of its malls. It doesn't include General Growth's management company or joint-venture holdings. In total, the filing covers roughly $24 billion of debt, the Journal reports, citing those close to the talks. The Chapter 11 filing might wipe out what remains of the company's stock, but it won't result in mall closures, according to the newspaper. Many analysts think General Growth will survive the bankruptcy intact, but perhaps smaller after selling properties, without resorting to liquidation.
General Growth said Thursday that all day-to-day operations and its shopping centers "will continue as usual." General Growth is the second-largest U.S. mall owner by number of properties behind Simon Property Group ( SPG), according to the Journal. "Our core business remains sound and is performing well with stable cash flows. We believe that Chapter 11 is the best process for restructuring maturing mortgage loans, reducing the company's corporate debt, and establishing a sustainable, long-term capital structure for the company," said CEO Adam Metz in a statement. "While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of Chapter 11." The company says it has about $29.6 billion in assets and more than $27 billion in liabilities, according to the Associated Press.