General Growth had previously put several of its flagship properties, including all three of its Las Vegas malls, up for sale. [ID:nBNG465138] Analys

General Growth had previously put several of its flagship properties, including all three of its Las Vegas malls, up for sale. [ID:nBNG465138]

Analysts and other real estate experts have speculated that mall owners Simon Property Group Inc -- the largest U.S. mall owner -- and Australia's Westfield Group would be interested in buying some of General Growth's assets from bankruptcy.

"Their stock of malls in the U.S. is pretty good -- they are decent quality retail real estate. And I imagine the market reaction if there are any sales of their assets will be positive," said Bruce Nutman, UK head of retail capital markets at CB Richard Ellis.

General Growth said its properties would be open for business and operating as usual.

"Our core business remains sound and is performing well with stable cash flows," General Growth Chief Executive Adam Metz said in a statement. "While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of Chapter 11."

General Growth has received a debtor-in-possession financing commitment of about $375 million from Pershing Square Capital Management LP as agent.

Pershing Square, the hedge fund run by William Ackman, owns about 25 percent of General Growth shares and had been urging the company to file for bankruptcy. Ackman has said its shares could rise even in bankruptcy because the market value of its assets far exceeds their book value.

At the end of 2008, about $15.17 billion of General Growth's debt consisted of mortgage loans that had been securitized into commercial mortgage-backed securities, according to research firm Trepp.

"This underscores that real estate companies are most vulnerable to refinancing risk rather than market risk," said Nomura's London-based property analyst Mike Prew.

General Growth shares were halted on the New York Stock Exchange on Thursday, but in premarket trade, they had fallen some 43 percent to 60 cents. The shares hit a 52-week high of $44.23 in May 2008 and a lifetime high of more than $67 in early 2007.

The bankruptcy helped push down the entire real estate investment trust sector, as the benchmark MSCI U.S. REIT Index fell 2.1 percent.

While General Growth bonds were not trading, Rouse's 5.375 percent notes due 2013 rose to 37.5 cents on dollar versus 29.25 cents on Wednesday, according to MarketAxess.

SETTING UP A TEAM

General Growth's refinancing troubles led to the firing of former CFO Bernard Freibaum in October. John Bucksbaum, who succeeded his father Matthew in 1999, stepped down as CEO the same month, but he remained chairman.

The company has hired law firms Weil Gotshal & Manges and Kirkland & Ellis to represent it, according to court papers. Pershing Square has hired law firm Jones Day and lead attorney Robert Profusek to represent it.

The case is In re: General Growth Properties Inc, U.S. Bankruptcy Court, Southern District of New York, No. 09-11977.

(Reporting by Ilaina Jonas and Emily Chasan; additional reporting by Sinead Cruise, Ajay Kamalakaran and Nick Carey; editing by Patrick Fitzgibbons and Tim Dobbyn)