CBL, shopping mall giant, files for bankruptcy

CBL Properties, which counts big retailers including JC Penney and Dick’s Sporting Goods as tenants, has filed Chapter 11 bankruptcy protection, according to a company filing despite making an effort in August with its creditors to stave off bankruptcy.

Ticker Security Last Change Change %
CBL CBL & ASSOCIATES PROP 0.15 -0.00 -1.95%

The Chattanooga, Tenn.-based company filed in the Southern District Court of Texas to allow it to keep operating while it attempts to fix its finances. This comes in large part because of a weakened U.S. economy and consumers increasingly turning to online shopping due to the coronavirus pandemic.

Shares of CBL have been under pressure since the start of the year and have lost nearly 95% of their value, as bankruptcy edged closer for the shopping mall operator.

In the filing, CBL said it estimated its assets between $1 billion and $10 billion, with its estimated liabilities around the same levels.

PERSONAL BANKRUPTCIES EXPECTED TO RISE IN 2021 AS STIMULUS ENDS

Bloomberg was the first to report news of the Chapter 11 filing.

In mid-August, CBL said it entered into a “comprehensive restructuring” that allowed it to get rid of $900 million worth of debt and at least $600 million in additional expenses, according to a company filing.

CBL is one of the largest landlords in the country, owning 108 commercial properties, totaling 68.2 million square feet in 26 states, according to its website. One of its largest renters, J.C. Penney, has already filed for bankruptcy, amid a cash crunch.

In mid-October, J.C. Penney CEO Jill Soltau said the company moved one step closer to exiting the Chapter 11 bankruptcy process ahead of the holiday season.

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The announcement comes as coronavirus-linked bankruptcies rise for corporations. According to data compiled by legal service firm Epiq, 5,529 U.S. businesses — including 747 in September — have sought relief in bankruptcy courts this year, up 33% over 2019 levels.

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Fox Business Lucas Manfredi and Daniella Genovese contributed to this story.

US commercial bankruptcies up 33% amid coronavirus pandemic

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CBL, Shopping Mall Operator, Files for Bankruptcy Protection

Shopping mall operator CBL & Associates Properties  (CBL) – Get Report filed for Chapter 11 bankruptcy protection, becoming the latest mall operator seeking to restructure its operations as the Covid-19 pandemic slams the brick-and-mortar retail sector.

CBL filed for bankruptcy protection with the U.S. bankruptcy court for the Southern District of Texas on Sunday. The Chattanooga, Tenn.-based real estate investment trust listed both estimated assets and liabilities in the range $1 billion to $10 billion.

CBL had announced in August that it had entered into a restructuring agreement with a group of its bondholders to allow it to regroup on its debts and beef up its balance sheet amid the pandemic, which shuttered malls outright for much of the spring and has continued to keep shoppers wary of physically entering closed spaces to shop.

However, CBL and other mall operators have continued to struggle as retailers that prior to the pandemic relied on shoppers flocking to malls to buy clothing, accessories and other goods have themselves shuttered their doors. 

J.C. Penney, one of CBL’s biggest renters, earlier this year filed for Chapter 11 protection. Other well-known brands that have stores in CBL malls include Victoria’s Secret and Bath & Body Works, both owned by L Brands  (LB) – Get Report, as well as Signet Jewelers  (SIG) – Get Report and Foot Locker  (FL) – Get Report.

CBL is structured as a real estate investment trust that invests in shopping centers, primarily in the southeastern and midwestern U.S. Shares of CBL were trading at 12 cents in premarket trading on Monday. The stock has fallen 55% since late March.

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