Eastland Mall parent company to file for Chapter 11 bankruptcy

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BLOOMINGTON, Ill. (WMBD) — Chattanooga, Tennessee based CBL Properties entered into a restructuring support agreement (RSA).

The company’s CEO said this would allow the company to “significantly strengthen our balance sheet and organization.”

As part of the RSA, CEO Stephen D. Lebovitz said the company would begin voluntary Chapter 11 protection in the U.S. Bankruptcy Court on October 1. It announced the news on August 19.
Lebovitz said it’s still business as usual at CBL’s properties.

“All CBL’s properties have reopened in accordance with the latest guidance from state and local governmental orders and will continue to operate as normal. Visitors to our properties will not notice any change in our operations,” he said.

Lebovitz believes this process will strengthen the company.

“CBL will continue to own and operate a portfolio of market-dominant shopping centers with a vision to transform our properties from traditional enclosed malls to suburban town centers,” Lebovitz said. “This process will allow us to strengthen our balance sheet and provide even more flexibility to execute on our strategies.”

“The Company intends to continue collaborative negotiations with its senior, secured lenders in the meantime to attempt to reach a consensual arrangement with those lenders,” read a news release from CBL. “In the event that such an arrangement were reached, the company would amend the RSA to include its senior secured lenders. The agreement may be amended by the company and with the consent of noteholders representing at least 75% of the Unsecured Notes that are held by noteholders that are party to the RSA.”

The Plan would eliminate the approximately $1.4 billion principal amount of Unsecured Notes in exchange for the issuance of $500 million of new senior secured notes due June 2028, approximately $50 million of cash and approximately 90% of the new common equity of the company to holders of the Unsecured Notes,” the release continued. “As a result, the Plan, if implemented, will result in the elimination of approximately $900 million of debt, extension of the company’s debt maturity schedule and a reduction in annual interest expense of more than $20 million. The Plan also contemplates eliminating the company’s more than $600 million obligation on its preferred stock in exchange for new common equity and warrants.”

The release stated the Plan will provide the company a stronger balance sheet while reducing total debt, extending debt maturities, and increasing liquidity while minimizing operational disruptions.

The company has been open for over 40 years.

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