Paul Hastings Advised Lenders on $1.2 Billion Restructuring of PREIT

April 05, 2024

Paul Hastings LLP advised an ad hoc group of first lien and second lien lenders in connection with the comprehensive restructuring of Pennsylvania Real Estate Investment Trust (“PREIT”). Headquartered in Philadelphia, PREIT is a real estate investment trust with more than 18.3 million square feet of retail space. The pre-packaged reorganization plan was supported by 100% of PREIT’s first and second lien secured lenders. Through the plan, PREIT reduced its total debt by approximately $835 million, extended its maturity runway, and received commitments of approximately $130 million of new money debtor-in-possession financing and exit revolver financing from a diverse group of leading investors, led by Redwood Capital Management, LLC and Nut Tree Capital Management, LP. Trade creditors and property level mortgage debt were unaffected by the restructuring.  Under the Plan, PREIT’s existing equity interests, including $384 million of preferred equity interests, were extinguished in exchange for a $10 million cash distribution. As of the effective date, our clients hold 100% of the exit revolver, 100% of the exit term loan and 100% of the new equity.

Financial Restructuring co-chair Kris Hansen and partner Jon Canfield led the Paul Hastings team, which also included partners Allison Miller, Sal Perrotto, Joseph Opich, and Eric Keller; Of Counsel Daniel Ginsberg, Thomas Shiah, and Gary Silber; associates Sam Lawand, Jillian McMillan, Bill McCue, Tina Davis, Matthew Sommer, and Annie Yu; and attorney Bobbi Langer

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