BEAUMONT, Texas — Two companies that own and operate malls nationwide filed for bankruptcy protection Monday, amid the coronavirus pandemic which has forced many tenants out of business or to miss rent payments.
Both companies, CBL Properties and Pennsylvania Real Estate Investment Trust, said their malls will be open during the bankruptcy process, the Associated Press reported.
CBL Properties owns both Parkdale Mall and Parkdale Crossing in Beaumont. CBL Properties' headquarters are in Chattanooga, Tennessee, but the company owns 107 properties across 26 states totaling 66.7 million square feet, including both enclosed and open-air retail shopping centers, according to a news release.
Before the COVID-19 pandemic, malls were struggling to compete against online shopping, but the virus forced many stores to close temporarily for months.
"The company intends to use the Chapter 11 process to implement terms outlined in the Restructuring Support Agreement that it entered into on August 18," CBL Properties said in a news release.
CBL Properties filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in court in the Southern District of Texas, located in Houston, according to the news release. The company said it is implementing a plan to recapitalize the company and restructure part of its debt, but all day-to-day operations at the mall are expected to continue normally.
The proposed plan would reduce CBL's debt and other obligations by about $1.5 billion while keeping retail shopping centers operating, the company said.
"After months of discussions and consideration of a number of alternatives, CBL's management and board of directors firmly believes the comprehensive restructuring... will provide CBL with the best plan to emerge as a stronger and more stable company," Chief Executive Officer Stephen D. Lebovitz said. “CBL will be in a better position to execute on our strategies and move forward as a stable and profitable business.”
CBL Properties has about $258.3 million in cash and available securities as of Sept. 30, which should meet operational and restructuring needs, the company said.
The company also filed for relief in order to continue paying their employees' wages and benefits as well as customer and vendor commitments during restructuring.
More information on CBL's restructuring is on the company's website at: cblproperties.com/restructuring.