Lou Conforti, chief executive officer and director of Washington Prime Group, said the filing will enable the company to align itself for success. The centerpiece of the investment is DeBartolo Commons, a 4-acre outdoor athletic and entertainment green space and event venue on the south side of the mall, which has an expected October 2021 grand opening. “During the financial restructuring, we will continue to work toward maximizing the value of our assets and our operating infrastructure,” Conforti said.
“The company has determined that the Chapter 11 path is the most effective next step to resolve the company’s outstanding indebtedness as we emerge from the pandemic,” Washington Prime said. In a prepared statement released Monday, Washington Prime cited impacts by the COVID-19 pandemic as creating “significant challenges for many consumer-facing companies.”
Throughout the financial restructuring, Washington Prime has said it will continue its part of the $30 million investment at the Southern Park Mall, of which about $9 million has already been spent. The company and 88 of its affiliated debtors voluntarily filed a petition for bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas.
Washington Prime has secured $100 million in new debtor-in-possession financing from creditors to support day-to-day operations while the bankruptcy process continues. The company will do so through the unsecured notes or an “alternative value-maximizing transaction that would repay, in full cash, all of the company’s corporate-level debt,” the company stated. By initiating the Chapter 11 filing, Washington Prime will “implement a comprehensive and consensual financial restructuring of the Company’s corporate-level debt that will allow the Company to substantially deleverage its balance sheet and strengthen its business and operations going forward,” Washington Prime said.
Following a restructuring support agreement with creditors led by SVPGLOBAL, which holds about 73 percent of secured corporate debt, and 67 percent of unsecured notes, the company filed for financial restructuring. The company owns and operates more than 100 shopping centers across the nation.
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