From from the WSJ:
A group of bondholders have ratcheted up the pressure on General Growth Properties Inc. by asking their trustee to sue the debt-laden mall owner for payment of their past-due bonds.Let's see how this news causes another mega squeeze in anything that is not nailed down. Sphere: Related Content Print this post
Law firm Wilmer Cutler Pickering Hale and Dorr LLP on Monday sent a letter to General Growth and the law firm representing many of its bondholders explaining that it represents holders of 25% of the company's $395 million in bonds due last March 16 that weren't paid, according to people familiar with the matter. Bondholders must collectively represent at least 25% of a given bond issue to compel a trustee to act on their behalf. A General Growth representative declined to comment Monday. A representative of Wilmer Hale couldn't immediately find the appropriate attorney to comment on Monday afternoon.
The bondholders' action pushes General Growth closer to a bankruptcy filing but doesn't mean that one is imminent. A trial spurred by the bondholders' lawsuit likely would take months to play out. Meanwhile, General Growth previously pledged to work with its unsecured lenders to craft an out-of-court restructuring of its balance sheet by the end of June. If General Growth meets that commitment, the trial might not be needed.Meanwhile, the bondholders' trustee – Bank of New York Mellon – likely will want to confirm which bondholders Wilmer Hale represents. That information isn't outlined in the law firm's letter. General Growth, based in Chicago, owns and manages more than 200 U.S. malls. The company has for months negotiated with its lenders for
extensions of its payment deadlines on chunks of its $27 billion debt load, repeatedly warning that it might need to seek Chapter 11 bankruptcy protection if it can't get reprieves. So far, roughly $2 billion of General Growth's debt has come due and gone unpaid while the company tries to craft its out-of-court restructuring with its lenders.Trading of General Growth's stock closed Monday at $1.05, up 10 cents, in 4 p.m. composite trading on the New York Stock Exchange.