On Thursday the nation's second-largest shopping mall owner, General Growth Properties, filed for Chapter 11 bankruptcy protection after failing to reach an out of court consensus on how to restructure its $27 billion debt.

General Growth, which owns more than 200 malls in 44 states including Faneuil Hall in Boston and the South Street Seaport in Manhattan, said shoppers at its malls will not be affected by its bankruptcy filing.

The Chicago-based company has been unable to refinance much of its debt leaving it with no option but to head to the courts. The company also said that approximately 158 regional shopping centers owned by GGP and certain other GGP subsidiaries have also filed for protection.

The company now finds itself paying the price for its aggressive expansion at the height of the real estate boom. As the credit crisis hit and the U.S. consumer started saving more and spending less, the company's retail clients felt the pinch, which flowed through to General Growth in the form of retail store closings and bankruptcies.

The company intends to pursue a plan of reorganization that extends mortgage maturities and reduces its corporate debt and overall leverage.

It has received a commitment for a debtor-in-possession financing facility of approximately $375 million from Pershing Square Capital Management.

“Our core business remains sound and is performing well with stable cash flows. We believe that chapter 11 is the best process for restructuring maturing mortgage loans, reducing the Company’s corporate debt, and establishing a sustainable, long-term capital structure for the Company,” said Adam Metz, Chief Executive Officer of the Company.

“While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of chapter 11,” he added.

The news sent the real estate investment trust's stock down 16 cents, or 15 percent, to 89 cents in midmorning trading. The stock traded last spring as high as $44.23.

The move by the General Growth had been widely anticipated since the fall, when the company warned it might have to seek bankruptcy protection if it didn't get lenders to rework its debt terms. Efforts to negotiate with its creditors ultimately fell short late last month.

Chapter 11 protection typically allows a company to hold off creditors and operate as normal while it develops a financial reorganization plan.

But its Rouse Co. subsidiary failed to convince enough holders of unsecured notes worth $2.25 billion as of Dec. 31 to accept a proposal that would let the unit avoid penalties for being behind on its debt payments and give it some time to refinance its debt load.

In February, the company reported lower-than-expected fourth-quarter funds from operations and a dip in revenue amid weaker retail rents.

The company has suspended its dividend, halted or slowed nearly all development projects and cut its work force by more than 20 percent. It also has sold some of its non-mall assets.