Parent Company of Mall of Louisiana to File for Chapter 11 Bankruptcy Protection

General Growth Properties, the parent company of the mega-retail center the Mall of Louisiana, announced this morning that it has filed for chapter 11 bankruptcy protection in a southern New York court. The collapse of mortgages put GGP into a tight situation financially and the credit crisis made it impossible for them to refinance or consolidate their debt outside of bankruptcy. They’re seeking for a total restructuring to lower their debt and increasing corporate leverage.

From GGP:

The Company has requested, and expects to receive, additional approvals to give the Company the authority to make payments to ensure that the Company’s shopping centers and other properties continue to operate uninterrupted in the ordinary course of business, including paying employee compensation, certain critical service providers, insurance and other claims. The Company intends to pay all providers of goods and services delivered post-petition.

Essentially, they’ve asked that even under their bankruptcy that they can continue doing business with their some 158 retail centers, which includes the Mall of Louisiana. There should be no disruption in service at this time as it seems unlikely that their bankruptcy protection would interfere with them doing business. The Mall of Louisiana is involved in these filings.

GGP’s retail centers, office properties and master planned communities will be open for business as usual as the company restructures our debt. Our properties will continue to operate, our employees will continue to come to work and get paid, and shoppers will continue to shop.

Fair enough—they don’t want anyone to worry and to continue to patronize their tenants.

It’s dubious whether the executives are culpable for any mismanaging or if the collapse of the mortgage market directly interfered in this capacity with their market. However, I don’t think that there will be any closing of the Mall. It continues to be a retail hub and generates significant capital. With the recent openeings, I find it hard to believe that either tenants will vacate the Mall (except for other financial reasons as with the case of Circuit City) or that patrons will cease visiting. The Mall receives over 12 million visitors annually, as reported by GGP. If GGP can’t sustain a restructuring and does indeed go under (as with the case of Circuit City), I’d think that it’d be likely that someone would buy the Mall (or that it’d spin off and become its own entity) as a property and continue running it.

We’ll develop this story as more information continues to flow.

[Sources: News Release; thanks to @nolagregschultz for the tip.]