A Chapter 11 Kinda Day
General Growth Properties filed for Chapter 11 due to the weight of $27 billion of debt. It is the largest property bankruptcy ever. General Growth has been struggling for nearly a year to refinance its debt. It is the second largest mall owner in the US with over 200 properties in 44 states. A fire sale of General Growth's mall assets is not expected.
MGM Mirage's fate took another twist today as Carl Ichan and Oaktree Capital Management, owners of hundreds of millions dollars of MGM Mirage debt, have told MGM Mirage that it should file for bankruptcy. Here is an updated article with more detail than the first link. According to the article, Kirk Kerkorian, 53% owner of MGM Mirage valued at $900 million, would have his equity wiped out in any bankruptcy filing. Kerkorian's stake in MGM Mirage was valued at $14.9 million at the end of 2007. The battle is still forming and the objectives of Ichan and Oaktree, who are not working together, are not clear. There is more at stake here than the huge egos of Kerkorian and Ichan. The $8.6 billion City Center development, which is the root of MGM Mirage's financial problems, is important to Las Vegas and other casinos. It is a huge project along the Strip. If this project were to go dark, Las Vegas' recession will get worse and last longer.