GREENSBORO, N.C. — It’s one of the most shared Facebook post stories in the last 24 hours. People shared the news almost 1,000 times about the bankruptcy filing for CBL Properties which owns The Friendly Center and Hanes Mall.
It’s not all that surprising. Due to a down economy and COVID closures, store tenants couldn't pay rent and that leaves the landlords in trouble.
But this bankruptcy doesn't mean the shopping centers are closing.
“It's one of the myths of bankruptcy from a personal side and a business side, that if someone files bankruptcy, they're going to lose their house or car, that's not the case,” explained Samatha Brumbrugh, a Partner with Ivey, McClellan, Gatton, Siegmund.
Chapter 11 is actually a safeguard for those businesses that want to continue to operate, it's a way to "reorganize" the business and try to become profitable again.
The company can sell assets and pay off the debt. And here's why the bankruptcy helps them do that.
“When any bankruptcy is filed, they do an automatic stay provides a time when collections activities are suspended. That stay gives the debtors breathing room to get its affairs in order to show the court they have a plan of reorganization,” said Brumbrugh.
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