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This story was updated on Monday, Nov. 2, 2020 at 11:40 p.m. with additional information.

Shopper Laura Pettit of Chattanooga said Monday as she was leaving Hamilton Place mall that she hadn't visited the retail center in eight months.

Pettit said she usually shops at thrift stores or goes online to Amazon, adding that "it's so convenient."

Mall owner CBL & Associates Properties Inc. on Monday announced it had filed for Chapter 11 bankruptcy protection, battered by the coronavirus pandemic and the shift by many shoppers to online retailers.

CBL's stock fell more than 40% on Monday, closing at 8.94 cents per share on the New York Stock Exchange.

Still, the longtime Chattanooga-based company, one of the biggest mall operators in the country, said its centers will remain open and "business as usual" as it reworks is massive debt load in the bankruptcy court.

In Chattanooga, the company operates Hamilton Place and Northgate malls along with nearby shopping centers. CBL's portfolio includes 107 properties totaling 66.7 million square feet in 26 states.

The Chapter 11 bankruptcy had been expected since late August when it entered into a Restructuring Support Agreement (RSA) with some of its lenders in anticipation of the filing.

Stephen Lebovitz, CBL's chief executive officer, said that if the effort is finalized as outlined in its amended plan, CBL will eliminate at least $1.5 billion in debt and preferred obligations. Also, the filing will lengthen debt maturity and improve CBL's net cash flow, he said.

"Ultimately, these steps will put us in a better position to execute our strategies," Lebovitz said.

As of Sept. 30, CBL said it had about $258.3 million in unrestricted cash on hand and available-for-sale securities. That amount, along with its net cash flow, will provide sufficient liquidity to run the business, the company said.

"We will continue to meet our ongoing financial obligations," Lebovitz said. "Visitors to our properties will not notice any change in our operations."

CBL said it has no plans to pursue a sale of the company at this time, and that it will continue to be led by its existing management.

While CBL's stock fell, Chris Kuiper, equity analyst at CFRA Research, lifted the opinion on the shares to a "Sell" from a "Strong Sell" in the wake of the Chapter 11 bankruptcy.

"With the official filing now complete, we believe some risk has been removed and are therefore raising our view," he said. "However, we remain negative on the common shares as we previously noted the restructuring plan will likely leave little for the common shareholders as they will be greatly diluted at best."

CBL's stock continues to trade on the exchange, according to the mall operator. It said that any recovery to existing shareholders will ultimately be determined in connection with the court-supervised Chapter 11 process.

CBL employs about 250 people in Chattanooga and some 450 across the company.

The company said it has filed customary motions with the court seeking types of relief to allow CBL to meet necessary obligations and fulfill its duties during the restructuring process, including authority to continue payment of employee wages and benefits, honor certain customer and vendor commitments and otherwise manage its day-to-day operations.

Earlier this summer, CBL said in an SEC filing there was "substantial doubt" it would continue to operate as a going concern.

Later, CBL elected not to make interest payments on some of its debt and started talks with the lenders after government-mandated lock downs hit the company's shopping centers along with an array of retail closings. Some of the top tenants in CBL's shopping centers have been among the most actively shedding stores amid the coronavirus-driven retail meltdown.

Lebovitz said that while the length of a Chapter 11 proceeding depends upon many factors, CBL already has support from certain key lenders and is hopeful for an expedited Chapter 11 process. But Lebovitz said it's premature to predict a timeline to the filing that was brought in U.S. Bankruptcy Court in the Southern District of Texas in Houston.

Lebovitz said it has continued negotiations with the lenders under its secured credit facility since the signing of the RSA and expect further discussions in an effort to reach "a tri-party consensual agreement between the company, noteholders and credit facility lenders during the bankruptcy process."

Also filing bankruptcy this week was another retail estate investment trust, PREIT, based in Philadelphia. It has more than 20 properties, including Cherry Hill Mall in Cherry Hill, New Jersey, and Viewmont Mall in Scranton, Pennsylvania.

PREIT said more stores are paying rent now than earlier this year, but it still expects its revenue from rent to continue to suffer as long as COVID-19 affects "the return of customers to malls."

Nathan Keller of Cleveland, Tennessee, said Monday outside Hamilton Place that he doesn't go to the mall much, but rather to stores such as Target and Walmart. He said he finds going to stores such as those easier than shopping at malls.

"It's more convenient for me," Keller said.

Contact Mike Pare at mpare@timesfreepress.com. Follow him on Twitter @MikePareTFP.

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