Washington Prime, with 3 North Texas shopping centers, files for bankruptcy, citing pandemic

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Photo by Simon Launay on Unsplash

Shopping center operator Washington Prime Group Inc. (NYSE: WPG) announced June 14 it was filing for Chap. 11 bankruptcy relief, citing the impact of the COVID-19 pandemic.

The Columbus, Ohio-based company owns several assets in Texas, including The Shops at Northeast Mall in Hurst, Irving Mall and Richardson Square in North Texas.

The Commerce Department issues its May tally of U.S. retail sales Tuesday. Economists predict sales fell a seasonally adjusted 0.5% last month. That would follow flat sales in April and a massive 10.7% jump in March, when many Americans received $1,400 stimulus checks that boosted spending. Retail spending covers about a third of overall consumer spending, which accounts for two-thirds of all economic activity in the U.S.

Washington Prime filed its bankruptcy petition in the United States Bankruptcy Court for the Southern District of Texas. The company enters Chapter 11 after executing a restructuring support agreement with creditors, led by SVPGlobal, that hold approximately 73% of the principal amount outstanding of the company’s secured corporate debt and 67% of the principal amount outstanding of the company’s unsecured notes. The company will utilize Chapter 11 to implement a comprehensive and consensual financial restructuring of the company’s corporate-level debt.

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Washington Prime Group said it has secured $100 million in new money debtor-in-possession financing from the Consenting Creditors to support day-to-day operations during the Chapter 11 process and ensure that all business operations continue in the ordinary course without interruption.

Lou Conforti, CEO and Director of Washington Prime Group, stated: “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.”

Kirkland & Ellis LLP is serving as legal counsel to the Company, and Alvarez & Marsal North America, LLC is serving as restructuring advisor. Guggenheim Securities, LLC is serving as the Company’s investment banker. Davis Polk & Wardwell LLP is serving as legal counsel and Evercore Group L.L.C. is serving as investment banker and financial advisor to SVPGlobal. Wachtell, Lipton, Rosen & Katz is serving as legal counsel and PJT Partners LP is serving as investment banker for an ad hoc group of Consenting Creditors.

Resources for the company’s stakeholders, and other information on the Company’s financial restructuring, can be accessed by visiting the restructuring website at http://cases.primeclerk.com/washingtonprime.