Washington Prime Group, owner of Polaris Fashion Place, has filed for Chapter 11 bankruptcy protection. The Columbus-based company has been struggling financially during the COVID-19 pandemic. The company claims to have secured $100 million in new debtor-in-possession financing from creditors. This will help support daily operations during the Chapter 11 process. They filed in the U.S Bankruptcy Court for the Southern District of Texas.
“The company’s financial restructuring will enable WPG to right size its balance sheet and position the company for success going forward. During the financial restructuring, we will continue to work toward maximizing the value of our assets and our operating infrastructure. The company expects operations to continue in the ordinary course for the benefit of our guests, tenants, vendors, stakeholders and colleagues.”
- Lou Conforti, CEO
Washington Prime reported a $262 million loss in 2020, with $111.4 million lost in the fourth quarter alone. According to their most recent annual report, the company had $3.2 billion in debt at the end of 2020.
The restructuring agreement reduces the company’s debt by nearly $950 million and a $190 million pay down of the company’s term loan facilities and revolving credit. It also includes a $325 million offer of a pay down.
Washington Prime owns approximately 100 shopping centers across the United States. Properties in Ohio owned by them include: Dayton Mall, Great Lakes Mall in Mentor, Indian Mound Mall in Heath, Lima Mall, Lima Center, New Towne Mall in New Philadelphia, Polaris Fashion Place, Southern Park Mall in Youngstown, and The Mall at Fairfield Commons in Beavercreek.
The company released a statement:
“The COVID-19 pandemic has created significant challenges for many consumer-facing companies, including Washington Prime Group, the owner of Polaris Fashion Place. 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. Throughout the Chapter 11 process, it will be business as usual at Polaris Fashion Place, where our tenants, sponsors and employees will continue operating as normal, with a focus on providing enjoyable experiences for our guests.”
“Please note, certain subsidiaries, including the Company’s joint ventures and the majority of the Company’s special purpose entities holding properties that secure mortgage loans will not be debtors in the Chapter 11 cases. Polaris Fashion Place is a non-debtor and will not be impacted by the Company’s Chapter 11 financial restructuring.”
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