Frequently Asked Questions Updated 12/02/09 GENERAL Q&A VENDOR Q&A MALL CUSTOMER Q&A GENERAL Q&A » What is "chapter 11?" » What does it mean to file for chapter 11 voluntarily? » Who filed Chapter 11? » Are General Growth Properties, Inc. and its subsidiaries going out of business? » Why did the Company file chapter 11? » What happens during chapter 11? » How is the Company going to get the cash to stay in business? » How long will it be before the Company can emerge from chapter 11? » Do companies ever emerge from Chapter 11? » Will there be any change in the management of the company? » Is the Company in control of its operations during bankruptcy? » What happens to existing debt obligations and financial claims against the Company during the chapter 11 process? » What happens to subsidiaries that did not file chapter 11 and existing debt obligations and financial claims against them? » How can I obtain more information? VENDOR Q&A » Are the chapter 11 filings relevant to all vendors? » Will vendors be paid for amounts owed before the filing date? » Will vendors receive payment for additional services and new orders? » How do vendors with pre-petition claims get paid under the terms of a plan of reorganization? » Can a vendor apply payments made after the filing to pre-petition invoices? » What if an invoice is submitted (or re-submitted) after the filing date? » If a check dated prior to the filing date has not been deposited will it be paid? What about any checks that were returned as unpaid prior to the filing date? » Is it true that vendors with outstanding "pre-petition" claims only get a few cents on the dollar for unpaid invoices? » What does a vendor need to do with respect to unpaid invoices for goods and services that have been provided after the Company's Chapter 11 filing? » Can a vendor renegotiate the terms of a contract? » Is the Company going to assume or reject my contract? When will it decide? » Will vendors be paid for goods and services provided to non-filing subsidiaries of the Company? » What if a vendor provides service to both filing and non-filing subsidiaries of General Growth? » How can the Company continue doing business in the normal course if it is in chapter 11? » How will the Company's chapter 11 filing affect vendor relationships? » Will special consideration be made for critical vendors? » Will any special provisions apply to utilities? » How will vendor payments be handled for malls emerging from bankruptcy? MALL CUSTOMER Q&A » What does GGP's bankruptcy mean for my local mall? Will it remain open? » Can shoppers expect the same promotions and events? » Will GGP cut back further on mall management and office staff? » Given GGP's bankruptcy, will my gift card still be good? GENERAL Q&A What is "chapter 11"? Today, this form of financial reorganization is widely viewed as an effective strategy to strengthen businesses and restructure debt obligations in an organized fashion. Chapter 11 is a legal mechanism for court-supervised reorganization or modification of a company's debt. Chapter 11 provides a way for companies to gain time to restructure or reduce their debts while continuing day-to-day operations. « Back to General Q&A What does it mean to file for chapter 11 voluntarily? A voluntary chapter 11 filing - such as ours - is an action voluntarily taken by a company to resolve financial challenges, such as lack of cash or excessive debt, in order to maximize the value of the "Estate" (the company's assets and operations) for the benefit of all of its interest holders. During the chapter 11 process, a company is able to continue to conduct business while reorganizing its finances and operations in order to meet the claims of those to whom it owes money. This is accomplished in part through a legal mechanism known as the "automatic stay," which stops creditors from taking action to collect money or property they are owed. A company in chapter 11 continues to provide employees with salaries and health benefits. It is also able to continue to do business with suppliers and customers in a routine manner. A company exits chapter 11 after the court has approved a chapter 11 plan. With respect to our ongoing business relationships, bankruptcy law provides priority status for the company's post-petition purchases (goods and services received after the date of the filing). We can and will pay for such post-petition goods and services in the normal course of business. Bankruptcy law generally prohibits payment for goods and services received before the filing date. Payment of these pre-petition invoices is prohibited until after a plan of reorganization is approved by the court, at which point the plan of reorganization dictates what creditors will receive on account of their claims. « Back to General Q&A Who filed chapter 11? General Growth Properties, Inc., approximately 166 regional shopping centers owned by GGP and certain other GGP subsidiaries (collectively, the "Company") voluntarily sought relief under chapter 11. GGP's third party management business (conducted by General Growth Management, Inc.), GGP's joint ventures and certain other subsidiaries have not filed for protection. A complete list of subsidiaries and the related operating properties that have filed voluntary petitions can be found at www.ggp.com, as well as a list of operating properties that are not involved in the Company's filings. « Back to General Q&A Are General Growth Properties, Inc. and its subsidiaries going out of business? No! The purpose of chapter 11 is to preserve and strengthen our business. We expect to do just that. All day to day operations and business of GGP's shopping centers and other properties will continue. « Back to General Q&A Why did the Company file chapter 11? The Company sought bankruptcy court assistance to restructure its finances and de-leverage its balance sheet because the collapse of the credit markets has made it impossible for GGP to refinance its maturing debt outside of chapter 11. Despite extensive efforts over many months to refinance or extend maturing debt, and attempts to sell certain properties to generate cash sufficient to satisfy mortgage debts as they mature, the Company has been unable to do so because the commercial real estate finance markets have ceased to function and effectively are closed, even for loans on quality properties generating stable income. We undertook extensive efforts to modify or refinance our debt, focus on our core business, and restructure our finances outside of chapter 11. We tried aggressively to raise funds from numerous sources and retained leading investment banks to undertake a global search for sources of capital at the corporate level. Our efforts to raise both debt and equity capital have been unsuccessful. We also made a concerted and sustained effort to refinance our mortgage debt in 2008, contacting dozens of major banks, life insurance companies, pension funds and lending brokers, but none were willing to refinance the loans. To obtain the time necessary to determine whether a long-term restructuring could be concluded out of court, beginning in November 2008, we entered into a number of short-term extensions and forbearance agreements with various lender groups. Despite all these efforts directed toward an out-of-court restructuring, we could not obtain creditor consent to forbearances and extensions sufficient to allow us to navigate a course through existing and upcoming maturities. We therefore reluctantly determined we had no choice other than a court-supervised reorganization process. « Back to General Q&A What happens during chapter 11? The chapter 11 filing triggers a "stay" that prevents anyone from collecting debts owed by the company, such as loan payments it would ordinarily make to the bank or payments to vendors for merchandise or services received before the filing. Chapter 11 permits daily operations to continue. Our malls will remain open. Employees will be paid, and goods and services provided after the filing date will be paid for in the ordinary course of business. While business continues, management and its creditors negotiate to restructure the company. The restructuring plan is called a plan of reorganization. Once the plan is filed with the court, the creditors and stockholders vote to approve the plan. When the plan is accepted by the court, it is confirmed, and the Company emerges from chapter 11 as a reorganized company. « Back to General Q&A How is the Company going to get the cash to stay in business? The Company has obtained a debtor-in-possession (DIP) financing facility of approximately $400 million from a group of pre-petition unsecured creditors of certain debtor subsidiaries. The new facility will provide a source of funds to GGP during the chapter 11 process. « Back to General Q&A How long will it be before the Company can emerge from chapter 11? We intend to move through the chapter 11 process as quickly as possible. It is too early to say how long that process will take. « Back to General Q&A Do companies ever emerge from chapter 11? Yes! Many companies, including such well-known companies as WorldCom, Kmart and Delta Air Lines, have successfully emerged from chapter 11. « Back to General Q&A Will there be any change in the management of the company? The Company will continue to be managed by the current executive team of the Company until such time as they or the board of directors determine to make further change. « Back to General Q&A Is the Company in control of its operations during bankruptcy? GGP's management will be running the day-to-day operations of the business. « Back to General Q&A What happens to existing debt obligations and financial claims against the Company during the chapter 11 process? Through a legal mechanism known as the "automatic stay," creditors are generally prevented from taking action against the Company to collect on account of debts that arose prior to our chapter 11 filings. « Back to General Q&A What happens to subsidiaries that did not file chapter 11 and existing debt obligations and financial claims against them? For companies that did not file chapter 11, business generally continues as normal and the bankruptcy laws and processes do not apply to them. Again, a list of operating properties that are not involved in the Company's filings can be found at www.ggp.com. « Back to General Q&A How can I obtain more information? You can obtain more information on our restructuring from a number of resources: The General Growth Properties, Inc. Internet Web site, www.ggp.com, where we have added a special section with information on our chapter 11 restructuring and where related inquires may be submitted. The Web site also contains a list of subsidiaries and related operating properties which filed bankruptcy, a list of operating properties not involved in the Company's filings and a link to the Company's public bankruptcy filings. The Internet Web site of our court-appointed claims agent, Kurtzman Carson Consultants LLC ("KCC"), www.kccllc.net/GeneralGrowth (this Web site is set up and maintained by KCC and will have general information about the chapter 11 case and most of the documents filed with the court). The toll-free hotline - 1-888-830-4665 - established by KCC to provide basic factual information regarding the Company's chapter 11 cases and regarding the process for filing claims in these cases. https://pacer.login.uscourts.gov/ (This is the official bankruptcy court Web site where you can also access court documents; however you will need to obtain a PACER account by calling the Pacer Service Center at 1-800-676-6856). Employees can find information and links on InsideGGP. « Back to General Q&A VENDOR Q&A Are the chapter 11 filings relevant to all vendors? No. Only vendors who provided goods or services to companies that filed chapter 11 (which are collectively referred to in this Q&A as the "Company") are potentially affected. As noted in the General Q&A, additional information regarding which companies filed and which did not is available on www.ggp.com. This Vendor Q&A only relates to vendors who provide services to companies that filed chapter 11. « Back to Vendor Q&A Will vendors be paid for amounts owed before the filing date? Under the bankruptcy code, payment of debts incurred prior to the chapter 11 filings will be addressed under the terms of a plan of reorganization, which must be approved by the court. Until the plan of reorganization is approved, GGP is prohibited from paying "pre-petition" debts unless we are directed by the court to proceed otherwise. We deeply regret any hardship or inconvenience that this process may cause. Please note that parties to a contract with the debtors are prohibited by the automatic stay from, among other things, attempting to terminate such contract or enforce remedies thereunder on account of the chapter 11 filing or unpaid amounts. « Back to Vendor Q&A Will vendors receive payment for additional services and new orders? While the Company is operating under guidelines of chapter 11, its vendors are afforded "administrative" status for all goods and services provided subsequent to the chapter 11 filing. New goods and services will be paid for in the normal course of business. Such payments are not prohibited by the automatic stay and are not subject to the approval of the bankruptcy court or any other party. The Company seeks the support of its vendors during its reorganization by continuing to provide services and continuing to ship on normal terms. « Back to Vendor Q&A How do vendors with pre-petition claims get paid under the terms of a plan of reorganization? (Updated 10/14/09) Vendors must stop collection activities. The Company has filed a schedule of all known creditors and the amount it believes each creditor is owed. If a vendor appears on this schedule and agrees with the scheduled claim amount it does not need to do anything. These claims will be paid under the terms of the plan of reorganization. This schedule can be found at www.kccllc.net/GeneralGrowth and choosing "Schedules/SOFAs" at the left. The vendor can then select the GGP property or entity that it believes it may have a pre-petition claim against. If a vendor does not appear on the schedule, or if there is a disagreement as to the scheduled amount of a claim, then a vendor must submit a proof of claim. A proof of claim form and instructions about the claim process is available at www.kccllc.net/GeneralGrowth , the Web site set up and maintained by our court-appointed claims agent, Kurtzman Carson Consultants LLC ("KCC"). Vendors may also call 1-888-830-4665, the hotline established by KCC. These forms and instructions were also mailed to all vendors after the Company filed its schedules and statements and after the court set a deadline for all claims to be filed. This deadline is November 12, 2009. If the Company determines that a vendor has a valid claim, that vendor will be eligible to receive the treatment described in the plan of reorganization. « Back to Vendor Q&A Can a vendor apply payments made after the filing to pre-petition invoices? No. Vendors must maintain a distinction between receivables for goods and services provided to the Company before the chapter 11 filing and those provided after the filing. « Back to Vendor Q&A What if an invoice is submitted (or re-submitted) after the filing date? Goods provided and services performed before the filing date will be considered pre-petition, regardless of when a vendor submits an invoice. « Back to Vendor Q&A If a check dated prior to the filing date has not been deposited will it be paid? What about any checks that were returned as unpaid prior to the filing date? The Company sincerely apologizes for any returned checks that occurred. The Company intended to honor all of the checks it had issued and believed it had sufficient funds to do so. Nevertheless, any uncleared check issued before the filing date is a payment for pre-petition goods or services, and checks for pre-petition goods and services cannot be honored subsequent to the filing date. If a check is not honored, the holder may follow the claims process to submit a claim to the bankruptcy court for the amount owed. « Back to Vendor Q&A Is it true that vendors with outstanding "pre-petition" claims only get a few cents on the dollar for unpaid invoices? At this time it is impossible to estimate what value a general unsecured claim will have in the Company's chapter 11 cases. « Back to Vendor Q&A What does a vendor need to do with respect to unpaid invoices for goods and services that have been provided after the Company's Chapter 11 filing? All invoices for post-petition goods and services should be submitted through the usual accounts payable channels. Payments will be processed in the normal way and according to normal terms. « Back to Vendor Q&A Can a vendor renegotiate the terms of a contract? The Company expects its vendors to continue to honor their existing agreements. Vendors that have a contract with the Company are required under bankruptcy law to continue to perform services or provide products under such contract unless otherwise ordered by the court. « Back to Vendor Q&A Is the Company going to assume or reject my contract? When will it decide? The Company is in the process of reviewing contracts, but at this time is unable to predict how long this process may take. « Back to Vendor Q&A Will vendors be paid for goods and services provided to non-filing subsidiaries of the Company? Goods and services that have been provided to non-filing subsidiaries of the Company will be paid in the ordinary course of business. Such payments are not impacted by the Company's chapter 11 filings. « Back to Vendor Q&A What if a vendor provides service to both filing and non-filing subsidiaries of General Growth? Services provided prior to the Company's chapter 11 filings to non-filing subsidiaries will be paid in the ordinary course of business; however, pre-petition services provided to filing subsidiaries will be subject to the payment restrictions applicable to all pre-petition claims. Services provided after the filing date will not be impacted by the chapter 11 filings. « Back to Vendor Q&A How can the Company continue doing business in the normal course if it is in chapter 11? Under chapter 11, the Company remains in possession of its property and is authorized to continue to operate and manage its business while management works to develop and confirm a plan of reorganization. The Company's operational model is sound and its properties are performing well. Additionally, the Company has received a commitment for a debtor-in-possession financing facility of approximately $375 million from Pershing Square Capital Management, L.P., as agent. When approved by the bankruptcy court, the new facility will provide a source of funds to the Company during the chapter 11 process. « Back to Vendor Q&A How will the Company's chapter 11 filing affect vendor relationships? The Company is committed to maintaining a positive relationship with its vendors. For goods and services provided post-petition, the Company will pay vendors in the ordinary course of business. Payment of pre-petition indebtedness will be addressed under the terms of a plan of reorganization or other court approved process. « Back to Vendor Q&A Will special consideration be made for critical vendors? The same principles described above regarding pre- and post-petition payments to vendors apply to critical vendors as well. However, the Company asked the court for the right, in its discretion, to pay a portion of the pre-petition claims of certain service providers that are essential to the on-going operation of the Company's properties, including its shopping centers, festival markets and strip centers. We obtained court permission to make these partial payments to a very limited number of national service providers. Any such payment would be conditioned upon the vendor's binding agreement to, among other terms, continue providing services to the Company. The Company has contacted this limited group of vendors to discuss this further. « Back to Vendor Q&A Will any special provisions apply to utilities? Under bankruptcy law the Company has 30 days after the chapter 11 filing date to provide all requesting utilities (electric, gas, water, etc.) with "adequate assurance" of payment for post-petition services. The Company obtained court approval for an amount of cash deposit which the Company believes will satisfy the "adequate assurance" requirement. « Back to Vendor Q&A How will vendor payments be handled for malls emerging from bankruptcy? All undisputed claims for pre-petition goods and services will be paid for in full. The company filed a schedule of all known creditors and the amount it believes each creditor is owed. This schedule can be found at www.kccllc.net/GeneralGrowth and choosing "Schedules/SOFA's at the left. If a vendor disagreed with the amount on the schedule, a vendor was required to file a proof of claim by November 12, 2009. « Back to Vendor Q&A MALL CUSTOMER Q&A General What does GGP's bankruptcy mean for my local mall? Will it remain open? Yes! Your local mall will remain very much open for business. We are committed to providing only the best in retail and entertainment. « Back to Mall Customer Q&A Can shoppers expect the same promotions and events? We need our malls to continue to successfully attract customers. Marketing is a vital tool to attract customers. We will continue to work with business partners on events which make business sense for our retailers, business partners and our bottom line. « Back to Mall Customer Q&A Will GGP cut back further on mall management and office staff? The company continually evaluates operations and all business lines to ensure the best strategies are in place to keep the core business strong and that resources are being used appropriately and prudently. This ongoing evaluation will continue. « Back to Mall Customer Q&A Gift Cards Given GGP's bankruptcy, will my gift card still be good? Our GGP Mall Gift Cards remain valid and retain their value. The cards are issued by American Express or Discover and remain valid wherever those cards are accepted. « Back to Mall Customer Q&A