HONOLULU (KHNL) - The owner of Ala Moana Shopping Center filed for Chapter 11 bankruptcy protection. General Growth Properties has $29.5 billion in assets, but it owes $27.3 billon.
For now, mall officials are saying things will be business as usual. There will be no closures and no layoffs for the time being.
General Growth owns Ala Moana, the Ward properties, as well as others throughout the state.
Shoppers at Ala Moana Shopping Center seem to be unaware of the bankruptcy.
"I'm scared. I'm scared," Jo Kealey said. "I lost a lot of my money years ago in the stock market. People are losing just too much."
This is the biggest real estate bankruptcy in US history.
Real estate analyst, Stephany Sofos, says the problem was General Growth took on so many new projects in a short period of time. And when the credit market crashed, they couldn't get credit.
"In business everything is about the velocity of money," Sofos said. "If you can't borrow money and you (don't have it) to build things, to sell things, you cannot move."
General Growth issued a statement, saying, "Our core business operations remain sound, stable, and profitable. Our operational model is not flawed and our properties are desirable and performing well."
Still, some shoppers are concerned.
"I just worry about the people and the unemployment rate that's here," Kealey said. "I'm afraid if the stores lose their lease, people are going to be more out of work and the state of Hawaii doesn't have enough money to support this."
Under Chapter 11, the company may be forced to sell some of its properties to reduce its debt.
"Ala Moana is their greatest asset," Sofos said. "It's the crown jewel and they would not want to see that. But if you are in bankruptcy, you don't get the choice anymore. It's up to the trustee."
And properties like Victoria Ward remain unfinished, another victim of the recession. Still many remain hopeful, General Growth can emerge a stronger, leaner company.
"I have a lot of confidence in who they are from what I've seen on a personal level and in a business environment and so I am cautiously optimistic for them," Sofos said.