Cupertino Square LLC, a California mall owner, filed for bankruptcy to block a foreclosure sale lender Gramercy Capital Corp. (GKK:US) had scheduled for Sept. 10.
The company listed assets and debts of $100 million to $500 million in its Chapter 11 reorganization filing yesterday in U.S. Bankruptcy Court in San Jose, California.
``The bankruptcy is to protect the creditors of the estate other than Gramercy,'' company attorney James Evans of Fulbright & Jaworski in Los Angeles said today in a phone interview.
Cupertino Square owns a shopping center in Cupertino, California, valued at $190 million and Gramercy's affiliate Gramercy Warehouse Funding I LLC improperly declared a default on a loan for the property, Evans said. Vallco International Shopping Center LLC, an affiliate, also filed for bankruptcy.
Laura Godfrey, a spokeswoman for Gramercy Capital, didn't immediately return a call seeking comment. Cupertino Square and Gramercy are involved in litigation over loans to fund renovations for new tenants.
``Unfortunately, the lingering effect of all the legal challenges has hamstrung our effort to revitalize Cupertino Square,'' company Chief Executive Phil Liao said in a statement.
Filing Chapter 11 will allow Cupertino Square to keep its stores open and continue managing and renovating the shopping center while it addresses the legal issues and restructures debt, according to the statement. The company is seeking a loan to fund operations during bankruptcy.
The case is In re Woodside Group LLC, 08-54897, U.S. Bankruptcy Court, Northern District of California (San Jose).
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