Due to the sluggish economy, many companies are struggling to meet their financial obligations as consumers scale back on purchases. That has forced many companies to file for bankruptcy, and it may also explain the troubles facing an upscale shopping venue in Atlantic City, New Jersey. The venue was recently bought by lenders at a foreclosure auction.
The previous owner of The Pier Shops at Caesars, Taubman Centers Inc., owes nearly $150 million on the complex. Unfortunately, the shopping center was built in 2006 when the Atlantic City market was at its height. Since then, it has gone through five years of declining revenue and lost market share.
After Taubman Centers defaulted on the mortgage, lenders opted to foreclose on the shopping center. On Oct. 28, they bought The Pier Shops for $25 million during a foreclosure auction, beating out one other bidder. As part of the sale, the mortgage was canceled, and the lenders also will not inherit the debt owed by Taubman Centers. The lenders plan to keep the shopping complex open while they attempt to find a new buyer.
For troubled firms, bankruptcy provides a way to restructure balance sheets without the threat of litigation. Here, no information was available as to whether Taubman Centers is considering filing for bankruptcy, but the company may benefit from doing so. An experienced New Jersey attorney who is knowledgeable in bankruptcy law may be able to assist with filing the proper court documents and with navigating the complicated bankruptcy process. Far from being a stigma, bankruptcy should be seen as an opportunity. It allows companies some breathing room to get their affairs in order and to eventually emerge as a leaner and more efficient operation.
Source: NJ.com, “Lenders to take over Pier Shops in Atlantic City,” Oct. 28, 2011