General Growth Says It Didn't Default

A lawyer for General Growth Properties Inc said the No. 2 mall owner in the United States is planning to fight two court rulings ordering the company to pay about $100 million in additional interest relating to loans it made prior to its bankruptcy two years ago, Reuters reported on August 16.

Court documents showed Chicago-based General Growth was ordered to pay $11 million to the State of New York’s Common Retirement Fund and about $89 million to a group of lenders that constituted a 2006 bank credit line. Chicago-based General Growth said that in both payments it did not have to pay the higher default rate plus legal and agency fees, and that the missed payments did not constitute a default, according to Reuters. The payments relate to higher interest payments triggered after General Growth missed loan payments prior to filing for bankruptcy protection.

The company became the biggest U.S. real estate bankruptcy case after it filed for protection from its creditors in April 2009. General Growth emerged from bankruptcy in November 2010, funded by investments from Brookfield Asset Management, William Ackman’s Pershing Square Capital LLC and others.

While the company repaid its creditors in full, Reuters reported General Growth repaid the New York pension fund and the 2006 credit facility lenders based on non-default interest rates.

General Growth is asking the U.S. Court of Appeals Second Circuit to take its appeal of Judge Allan Gropper's order that the company to pay the difference between the two rates.

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