Bankrupt General Growth Properties Inc said on Wednesday it had opened its books to Simon Property Group and others, even as it sought court approval for more time for the exclusive right to file an exit plan.
For its part, General Growth has proposed a plan backed by Brookfield Asset Management
General Growth's chief operating officer, Thomas Nolan, said at a packed bankruptcy court hearing in Manhattan that the company is anxious to present the new GGP and plans to be out soliciting bids in the next 60 days.
A lawyer for General Growth, the second-largest U.S. mall owner, said the committee of unsecured creditors objected to a six-month extension of the exclusivity period proposed by GGP. In court papers, the creditors committee said it could accept a 45-day extension.
Michael Stamer of Akin Gump Strauss Hauer & Feld, who is representing the committee of unsecured creditors, said they liked Simon's offer but were not committed to it.
The committee is not locked up with Simon, he said.
Activist investor William Ackman, who is General Growth's largest shareholder and a director and has less than $500 million of its bonds, was also present at the hearing before U.S. Bankruptcy Judge Allan Gropper. General Growth Chief Executive Adam Metz also was in the front row.
OPENING THE BOOKS
Simon gave a term sheet for its bid to General Growth on Tuesday night, and GGP opened up its data room to give suitors access to information about it on Wednesday morning, said the company's lawyer, Marcia Goldstein of Weil, Gotshal & Manges.
The data room is open and there are nine representatives from Simon in it, she said of the website that gives parties access to the company's financial records, including rent and lease terms.
About four or five other property owners and potential investors have signed nondisclosure agreements that allow them access to the data, Nolan said.
Simon's term sheet was the same as the one General Growth had already snubbed, Goldstein said.
General Growth also said it had restructured $11.6 billion of $14.9 billion of property-related debt, and was close to working out a deal covering 24 loans totaling $1.5 billion. Potential investors began contacting the company as it made progress renegotiating it mortgages and other property-level debt, Nolan said.
General Growth, which owns more than 200 malls, became the largest U.S. real estate failure in history when it filed for bankruptcy in April last year. Its properties include such malls as Fashion Show in Las Vegas, Ala Moana Center in Hawaii and Faneuil Hall Marketplace in Boston.
The Chicago-based company is pursuing a complex plan that calls for Brookfield
Nolan acknowledged that Brookfield, which has not signed a definitive agreement, is not compelled to come up with the cash if General Growth fails to raise an additional $5.8 billion through sales of assets, equity and debt.
The unsecured creditors committee has accused the company of not pursuing other potential deals to serve as a stalking horse. It said that the company has not shared information about its plans with the creditors committee
They were aware we were having discussions with another party. They just did not know who the party was, Nolan said, adding that the company is not obligated to share that information.
Nor has the company disclosed the investors and other companies have signed the nondisclosure agreements, he said.
General Growth's shares were up 1.9 percent at $13.46 in over-the-counter trade on Wednesday afternoon, while in midday trading, while shares of Simon were off 0.08 percent at $77.95 on the New York Stock Exchange.
The case is In re: General Growth Properties Inc, U.S. Bankruptcy Court, Southern District of New York, No. 09-11977.
(Reporting by Ilaina Jonas; writing by Paritosh Bansal; Editing by Tim Dobbyn and Matthew Lewis)
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