Elk Grove Mall Developer Challenged on Chapter 11 Filing

The developer of the unfinished Elk Grove Promenade, Chicago-based General Growth Properties (GGP), is being challenged by several creditors...

The developer of the unfinished Elk Grove Promenade, Chicago-based General Growth Properties (GGP), is being challenged by several creditors as it navigates it Chapter 11 bankruptcy filing.







Several creditors have filed to have a number of GGP properties removed from the proceedings contending the individual properties generate sufficient cash to pay creditors. The lenders content GGP is using the bankruptcy to negotiate lower rates than they would otherwise be obliged to pay.

Part of GGP’s problem is that mall properties are legally organized as special purpose entities (SPEs), separate from the parent company. Ironically, the SPE were formed to protect GGP from being liable for any of the individual properties.

A hearing date is set for June 17.

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