Pennsylvania Real Estate Investment Trust filed for its second bankruptcy in three years, succumbing to the consumer shift away from bricks-and-mortar locations, WSJ Pro Bankruptcy reported. The owner of 16 shopping malls, primarily on the East Coast, filed a chapter 11 petition in the U.S. Bankruptcy Court in Delaware seeking to implement a restructuring agreement that allows its junior lenders to take control of the company. Under the agreement, junior lenders that are collectively owed more than $700 million will exchange their holdings into a controlling equity interest in the company. Certain of those lenders will provide a new $60 million debtor-in-possession facility to fund the bankruptcy proceedings. Senior lenders owed roughly $400 million will have their claims either repaid in cash or through a new exit loan facility, according to a securities filing. Mario Ventresca, Preit’s chief financial officer, said in a declaration to the court Monday that its previous bankruptcy, filed in 2020, “proved insufficient to address the company’s long-term liquidity needs and persisting macroeconomic challenges.” Ventresca attributed some of the company’s troubles to online shopping and lower consumer spending, due in part to rising inflation and interest rates. Many of Preit’s tenants, including anchors such as JCPenney, commenced their own bankruptcy cases and closed stores at Preit’s properties, he said.
