Report: Owner of Dare Centre in KDH preparing to file bankruptcy

[Kari Pugh photo]

The owner of the Dare Centre shopping complex in Kill Devil Hills is reported to be preparing to file bankruptcy, as mall owners around the country face mounting financial pressures stemming from the coronavirus pandemic.

According to the report by Bloomberg, sources said Washington Prime Group of Columbus, Ohio is running out of time to avert a default after it skipped an interest payment on its debt.

The real estate investment trust, which owns about 100 malls throughout the U.S. including several in the Triangle and Charlote, said last month that it would use a 30-day grace period to continue negotiations with its lenders. Yet those talks are faltering, said the people, who asked not to be named discussing confidential preparations.

The plan to file for Chapter 11 protection isn’t final and could change if negotiations evolve or the company’s grace period is extended, the sources said. A representative for Washington Prime declined to comment.

Shares of Washington Prime sunk as much as 63% to $2.34 on Thursday after Bloomberg reported the potential filing, triggering multiple trading halts.

Washington Prime has said the impact from the COVID-19 pandemic could affect its ability to comply with debt covenants and continue operations, or remain a going concern “under certain circumstances.” It said in November that it was “actively negotiating” with debt holders to cut borrowings.

At that time, Chief Executive Officer Lou Conforti emphasized that bankruptcy was not on the table.

“It’s important to note that this action, and I would like everybody listen up, in no way shape or form has anything to do with a bankruptcy or a corporate restructuring and if anything, will serve as a testament to our operational abilities,” Conforti said in a conference call with investors.

All but one of the spaces are currently occupied at the Dare Centre located at the corner of North Croatan Highway and Third Street, adjacent to the Kill Devil Hills Fire Station.

The owner of department store Belk, one of the Dare Centre anchors, last month had its bankruptcy filing accepted by a judge. No store closings were mentioned as part of the restructuring plan.