CBL & Associates Properties Inc. yesterday urged a bankruptcy judge to reject senior lenders' efforts to assert control over the mall operators' assets and operations, saying that its ability to reorganize in chapter 11 is at stake, Reuters reported. The statements from CBL attorney, Ray Schrock of Weil Gotshal & Manges, came during opening arguments in a virtual trial before Chief U.S. Bankruptcy Judge David Jones in Houston over lender claims that a series of alleged defaults on the loan documents gave them the right to take over certain subsidiaries and collect revenues directly from tenants. Wells Fargo & Co., which heads up the lender group and is represented by Jones Day, claims that CBL did not have the authority to file for bankruptcy and is looking to have the case thrown out. The case is now a showdown between the lenders and the company, which said it was forced to seek bankruptcy to protect itself and its assets from Wells Fargo. Chattanooga-based CBL filed for chapter 11 protection in November following months of COVID-19-related economic turmoil for its retail tenants and Wells Fargo's allegations of default on a $1.1 billion loan. The company, which was one of the first major mall operators to seek bankruptcy since the onslaught of the pandemic, reported $4 billion in debt and a restructuring support agreement with holders of its $1.4 billion in unsecured notes. Under the noteholder-backed restructuring agreement, CBL would reduce its debt load and preferred obligations by $1.5 billion.
