The mall is a major piece of the landscape in the area and may seem to be above financial trouble, but it is not. The company that owns the mall has announced it may not be able to pay nearly $1 billion in debt coming due next month.
General Growth Properties also has another $3 billion in debt it must pay next year. The company says it has limited ability to make those payments and corporate officials raised the possibility this week that it could file for Chapter 11 bankruptcy protection.
Jill Beckham owns a Woodlands area business and says sales are flat. Hearing the mall owner is in trouble is not very comforting.
"We should be above where we were last year, right now especially right before Christmas," she told us.
In our area, General Growth Properties also owns First Colony Mall, Willowbrook Mall and Deerbrook Mall. If the company files for Chapter 11 bankruptcy protection, the stores will not go away and shoppers will not have to find other places to get holiday and Christmas gifts.
"Someone just walking into a store, walking into the mall will not notice the difference, long term though the company does have some serious cash flow problems," said Houston CPA Bob Martin. "They may solve that by selling off properties and possibly even liquidating properties."
Martin says if the company seeks Chapter 11 bankruptcy protection, it could give General Growth Properties time to get back on track.
"A company is allowed to seek chapter 11 bankruptcy protection to give it a chance to reorganize," Martin explained.
So far General Growth Properties has not announced it will seek Chapter 11 bankruptcy protection, but company officials said if the company can't refinance its debt, it may be forced to seek legal protection from creditors.
So the stores are not going to go away, but what happened to the company?
Well, we've talked about the credit crunch and this is another example of how it is affecting American business. In the past the mall's owners may have been able to borrow money to pay off debt, or sell properties, but right now the company may not be able to get a loan. To complicate things if it wants to sell, potential buyers may have trouble getting loans as well.
