General Growth: 13 properties may be turned over to lenders

General Growth Properties Inc., the second-largest mall owner in the U.S., said it's identified 13 "underperforming" retail properties that may be turned over to lenders after the company emerges from bankruptcy.

General Growth has until two days after it exits bankruptcy to decide whether the properties, which serve as collateral on loans, should be deeded to lenders or the loans should be modified, the Chicago-based company said today in a filing with the U.S. Securities and Exchange Commission. The company plans to leave Chapter 11 bankruptcy protection by Sept. 30, President Tom Nolan said last week.

Of the 13 retail properties that may be turned over to lenders, which General Growth calls "special consideration properties," five had emerged from bankruptcy protection as of the end of 2009. The company had a gain of $54.2 million related to their reorganization. The eight other properties emerged in the first quarter, resulting in a $69.3 million gain, General Growth said in today's filing.

General Growth filed the biggest U.S. real estate bankruptcy in April 2009 after amassing $27 billion in debt by making acquisitions. The company was at the center of a takeover battle between Simon Property Group Inc., a larger rival, and a group led by Brookfield Asset Management Inc.

Simon withdrew its offer May 7, the same day a bankruptcy court approved a plan for General Growth to emerge with investments by Brookfield and its partners.

General Growth said in court papers filed yesterday that it needs more time to settle or fight thousands of claims from creditors in its bankruptcy case.

General Growth said it has resolved or is preparing objections to about two thirds of 10,000 claims for payment filed against the company. It's seeking more time to review and object to about 3,400 claims, the mall owner said in its court filing.

The claims filed against General Growth last year totaled $250 billion, "a number that obviously is far greater than" its actual liabilities, the company said in court papers. General Growth listed total debts of $27 billion in its bankruptcy filing.