“General Growth’s Bankruptcy Spooks Its Hawaii Tenants”
This headline in the Honolulu Star Bulletin is scarier than the bankruptcy itself is. The United States offers what is called “Bankruptcy Protection” under chapter 11 of the Bankruptcy Code to essentially “Protect” troubled companies from thier creditors, allowing them time to re-organize and become profitable again, and hopefully pay off those creditors.
A chapter 7 Bankruptcy is quite different. That’s when the company throws in the towel and the creditors are hung out to dry. They may get something, someday, but not soon and not much.
Focus on Results
While nobody likes to think about bankruptcy, those forced into it are more respectable for going 11 than 7. We need to wish them well and give them the time they need to get things going back in the right direction. A company (or country) in financial trouble didn’t get there overnight. Change takes time.
General Growth is not the first company with a huge stake in Hawaii to seek Chapter 11 protection. On March 21, 2003, Hawaiian Airlines, Inc. filed a voluntary Chapter 11 petition for reorganization. Fortunately for us all, their creditors, employees and customers stuck with them, and today, in spite of the current challenging times, they are one of very few airlines that are profitable, and proudly post the best on-time record in the industry. It took some time, but they did it and did it well.
By contrast, when faced with the same challenges, Aloha Airlines was not willing to spend the time and money needed to fix things, they shut down virtually over night stranding their employees, creditors and customers.
Ala Moana Shopping Center
General Growth owns Ala Moana Center, Ward Centers, Whaler’s Village and several other properties in Hawaii. They reported $29.6 billion in assets and $27.3 billion in debts. Those are some ptretty hefty numbers, and turning things around will be a pretty hefty challenge, but I think they deserve our support and patience as they seek to make things better for everyone.