Lincolnwood Town Center Owner Declares Bankruptcy

LINCOLNWOOD, IL — The owner of Lincolnwood Town Center and more than 100 other shopping centers filed for bankruptcy Sunday, citing the "compounding and devastating impact" of the COVID-19 pandemic on the already struggling retail sector.

Washington Prime Group, or WPG, a publicly traded Columbus-based mall landlord, owns more than 100 malls across the country, including Countryside Plaza in Countryside, Lake View Plaza in Orland Park and Lake Plaza in Waukegan.

CEO Lou Conforti said company officials expect its operations to continue normally for stores and shoppers at its properties.

“The Company’s financial restructuring will enable WPG to right size its balance sheet and position the Company for success going forward," Conforti said in a statement. "During the financial restructuring, we will continue to work toward maximizing the value of our assets and our operating infrastructure.

In a filing for Chapter 11 relief in Houston bankruptcy court, Chief Financial Officer Mark Yale said the firm was facing challenges from closing department stores and remodeling its properties even before the coronavirus pandemic slowed or halted foot traffic.

"The financial stability of [WPG's] tenants impacted by the closure or reduction of their operations due to the COVID-19 pandemic, and in turn the future revenue and cash flows of [WPG], remains uncertain," Yale said.

The real estate investment trust, he said, provided its tenants more than $24 million in rent relief last year, but many are still unable to meet their lease obligations or facing bankruptcy themselves.

Currently, Washington Prime has about $3.9 billion in debt obligations.

As part of a restructuring agreement with SVPGlobal, which represents creditors holding 73 percent of its secured debt and 67 percent of its unsecured debt, it will deleverage its balance sheet by nearly $950 million, company officials announced.

The bankruptcy plan calls for selling $325 million worth of equity in the company to help pay down some of that debt. The company will also spend $190 million to pay down its revolving credit and convert unsecured debt into equity, according to a statement announcing the bankruptcy filing.

Company officials also announced it had secured $100 million of financing to allow for ongoing day-to-day operations during the bankruptcy proceedings.

Earlier this year, the company skipped interest and mortgage payments on its debt, and it had been operating under a forbearance agreement with its debtors that would have expired Monday night, although it had been previously extended.

Lincolnwood Town Center and five other malls are in receivership as part of foreclosure proceedings.

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Last month, the company announced a first quarter loss of $55.4 million, with revenue down by $20.7 million compared to the first three months of 2020.

The company also spent $14.5 million in legal and professional fees related to "negotiations and discussions" about restructuring, according to quarterly results.

The company's stock, which had been swept up in the frenzy of "meme stock" trading earlier this month, was down by about 40 percent Monday morning.