Pennsylvania REIT (PREIT) Files Chapter 11 Again

Pennsylvania REIT (PREIT) Files Chapter 11 Bankruptcy Protection

Have you suffered investment losses in Pennsylvania REIT also known as PREIT at the advice of your financial advisor? If so, the securities attorneys at The White Law Group may be able to help you recover your losses by filing a complaint against the brokerage firm that sold you the investment.  

Pennsylvania REIT (OTC:PRET), “PREIT”, reportedly filed for Chapter 11 bankruptcy proceedings after it reached an agreement with lenders to reorganize the shopping center real estate investment trust’s balance sheet, according to reports on December 11, 2023. This is PREIT’s second Chapter 11 filing in the past five years. The company reportedly filed for bankruptcy proceedings in November 2020, post Covid pandemic and emerged from Chapter 11 in December 2020. 

Going forward PREIT will no longer be a publicly traded company, and existing preferred and common shares will be canceled. An aggregate $10M payment, net of costs defined in the prepackaged plan, will be provided to holders of existing preferred and common stock. Some 70% of that payment will go to preferred shareholders, with the remaining 30% going to common shareholders.  

The prepackaged reorganization plan reportedly received support by 100% of PREIT’s first and second lien lenders. Chapter 11 proceedings typically allow a company to continue operations while restructuring debt. The company will pay all vendors, suppliers, and employees during the proceedings. 

The company plans to reduce its debt by ~$880M and extend its maturity runway, according to reports. The company has received commitments for $135M of debtor-in-possession and exit financing from a group of investors led by Redwood Capital Management and Nut Tree Capital Management.  

The company reportedly expects that it will be able to emerge from bankruptcy by February 2024. 

Reorganization Plan – PREIT

Under the reorganization plan, first lien lenders reportedly have the option to receive either a cash payment equal to 100% of their claims or the option to convert their claims into term loans under the exit facility in an amount equal to 101% of their claims. 

Second lien lenders will reportedly get their pro rata share of 65% of new equity interests in the reorganized PREIT and second lien lenders who commit to backstop the exit facility will receive 35% of the new equity interests in the reorganized PREIT. 

PREIT’s stock has reportedly dropped 41% in the past month, and 80% YTD. 

Broker Due Diligence 

Broker dealers are required to perform adequate due diligence on all investment recommendations including real estate investment trusts.  They must ensure that each investment is suitable for the investor considering the investor’s age, risk tolerance, net worth, financial needs, and investment experience. 

If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment, they may be liable for investment losses.  

Free Consultation with a Securities Attorney 

To determine whether you may be able to recover investment losses in Pennsylvania REIT, please contact The White Law Group at 1-888-637-5510 for a free consultation. 

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. The firm works on a contingency fee basis and may be able to represent you in a complaint against your brokerage firm. 

For more information on the firm, visit www.WhiteSecuritiesLaw.com.