General Growth takes step to avoid bankruptcy

Thursday, Dec. 18, 2008 | 11:31 a.m.

General Growth Properties

General Growth Properties Inc., a big developer and shopping mall owner in Las Vegas, appears to have taken a step toward avoiding bankruptcy -- at least in the short term.

The Chicago company said today its syndicate of lenders for the $900 million Fashion Show mall and Palazzo mall mortgage loans in Las Vegas has entered into a Forbearance and Waiver agreement that extends until Feb. 12.

General Growth also announced that its syndicate of lenders for a 2006 Senior Credit Agreement also entered into a Forbearance and Waiver agreement that extends until Jan. 30.

Without the forbearance deals, the company could have been forced into bankruptcy in order to protect itself from creditors.

General Growth stock was steady on the news, rising 6 cents today to $1.64.

In Las Vegas, General Growth owns The Howard Hughes Corporation, developer of the big Summerlin planned community.

Its Las Vegas shopping malls are the Fashion Show, Shoppes at the Palazzo and Grand Canal Shoppes at the Venetian on the Las Vegas Strip; as well as the regional Boulevard and Meadows malls.

Development has slowed on General Growth's planned Summerlin Centre mall as the company struggles with a massive debt load and the slowdown in the U.S. economy.