Lenders on Wednesday filed a foreclosure lawsuit against Park Plaza Mall of Little Rock, asking the court to appoint a receiver after mall owners missed their payment on a loan with a $74.5 million balance.
Deutsche Bank Trust Co. Americas filed the foreclosure lawsuit in Pulaski County Circuit Court. The bank, acting as trustee for Registered Holders of Wells Fargo Commercial Mortgage Securities, says the mall defaulted on the loan, citing a missed payment due in April 2020.
Deutsche Bank is asking the court to appoint a receiver to operate and manage the property amid the foreclosure "to protect the Property from potential imminent diminution in value," the lawsuit said.
More: Download the lawsuit.
The lawsuit is tied to a loan of $99.4 million originally made to Park Plaza's owner, CBL Properties of Chattanooga, Tennessee, by Wells Fargo Bank on March 24, 2011. The loan is secured by the mall property.
CBL, a real estate investment trust that is the largest owner and manager of shopping centers in the Southeast, telegraphed the inevitable legal action last summer, when it said in a May Securities & Exchange Commission filing that it expected to cooperate with lenders "in foreclosure proceedings."
The mall owner said it had stopped talking with lenders about a potential modification and extension of two loans — one secured by Park Plaza and another by a mall in Illinois.
According to the lawsuit, the principal balance on the Park Plaza loan is $74.5 million; interest, default interest, attorneys’ fees and other costs put the outstanding indebtedness at about $86.7 million.
CBL filed Chapter 11 bankruptcy in November, seeking to restructure its debt and survive amid rising e-commerce and declining in-store traffic. Some of CBL's biggest tenants have filed bankruptcy themselves. Other tenants have had trouble paying the rent amid COVID-19.
Built as an open-air shopping center in 1960, Park Plaza reopened in 1988 as the city’s biggest enclosed mall with 660,000 SF of retail space. It is anchored by publicly traded department store chain Dillard's Inc. of Little Rock.