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CONTINGENCIES | 12 Months Ended
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Dec. 31, 2021
Commitments And Contingencies Disclosure [Abstract] |
CONTINGENCIES | NOTE 16. CONTINGENCIES Securities Litigation The Company and certain of its officers and directors were named as defendants in three putative securities class action lawsuits (collectively, the “Securities Class Action Litigation”), each filed in the United States District Court for the Eastern District of Tennessee, on behalf of all persons who purchased or otherwise acquired the Company’s securities during a specified period of time. Those cases were consolidated on July 17, 2019, under the caption In re CBL & Associates Properties, Inc. Securities Litigation, 1:19-cv-00149-JRG-CHS, and a consolidated amended complaint was filed on November 5, 2019, seeking to represent a class of purchasers from July 29, 2014 through March 26, 2019. The operative complaint filed in the Securities Class Action Litigation alleges violations of the securities laws, including, among other things, that the defendants made certain materially false and misleading statements and omissions regarding the Company’s contingent liabilities, business, operations, and prospects during the periods of time specified above. The plaintiffs seek compensatory damages and attorneys’ fees and costs, among other relief, but have not specified the amount of damages sought. The defendants moved to dismiss all claims on December 20, 2019, and that motion remains pending. On November 2, 2021, the defendants filed a proposed supplemental motion to dismiss brief, arguing that the Company should be dismissed as a defendant in the case because the Plan and related confirmation order discharge any claims against the Company and enjoin the plaintiffs from taking any further action against the Company. The proposed supplemental motion to dismiss brief also argued that the operative complaint fails to state a viable claim against any individual defendant. The outcome of these legal proceedings cannot be predicted with certainty. After the Company’s emergence from bankruptcy, this matter was returned to the court’s active docket. Certain of the Company’s current and former directors and officers were named as defendants in nine shareholder derivative lawsuits (collectively, the “Derivative Litigation”). On June 4, 2019, a shareholder filed a putative derivative complaint captioned Robert Garfield v. Stephen D. Lebovitz et al., 1:19-cv-01038-LPS, in the United States District Court for the District of Delaware (the “Garfield Derivative Action”), purportedly on behalf of the Company against certain of its officers and directors. On June 24, 2019, September 5, 2019 and September 25, 2019, respectively, other shareholders filed three additional putative derivative complaints, each in the United States District Court for the District of Delaware, captioned as follows: Robert Cohen v. Stephen D. Lebovitz et al., 1:19-cv-01185-LPS (the “Cohen Derivative Action”); Travis Lore v. Stephen D. Lebovitz et al., 1:19-cv-01665-LPS (the “Lore Derivative Action”), and City of Gainesville Cons. Police Officers’ and Firefighters Retirement Plan v. Stephen D. Lebovitz et al., 1:19-cv-01800 (the “Gainesville Derivative Action”), each asserting substantially similar claims purportedly on behalf of the Company against similar defendants. The Court consolidated the Garfield Derivative Action and the Cohen Derivative Action on July 17, 2019, under the caption In re CBL & Associates Properties, Inc. Derivative Litigation, 1:19-cv-01038-LPS (the "Consolidated Derivative Action"). On July 25, 2019, the Court stayed proceedings in the Consolidated Derivative Action pending resolution of an eventual motion to dismiss in the Securities Class Action Litigation. On October 14, 2019, the parties to the Gainesville Derivative Action and the Lore Derivative Action filed a joint stipulation and proposed order confirming that each of those cases is subject to the consolidation order previously entered by the Court in the Consolidated Derivative Action and that further proceedings in those cases are stayed pending resolution of an eventual motion to dismiss in the Securities Class Action Litigation. On July 22, 2019, a shareholder filed a putative derivative complaint captioned Shebitz v. Lebovitz et al., 1:19-cv-00213, in the United States District Court for the Eastern District of Tennessee (the “Shebitz Derivative Action”); on January 10, 2020, a shareholder filed a putative derivative complaint captioned Chatman v. Lebovitz, et al., 2020-0011-JTL, in the Delaware Chancery Court (the “Chatman Derivative Action”); on February 12, 2020, a shareholder filed a putative derivative complaint captioned Kurup v. Lebovitz, et al., 2020-0070-JTL, in the Delaware Chancery Court (the “Kurup Derivative Action”); on February 26, 2020, a shareholder filed a putative derivative complaint captioned Kemmer v. Lebovitz, et al., 1:20-cv-00052, in the United States District Court for the Eastern District of Tennessee (the “Kemmer Derivative Action”); and on April 14, 2020, a shareholder filed a putative derivative complaint captioned Hebig v. Lebovitz, et al., 1:19-cv-00149-JRG-CHS, in the United States District Court for the Eastern District of Tennessee (the “Hebig Derivative Action”), each asserting substantially similar claims purportedly on behalf of the Company against similar defendants. After the Company’s emergence from bankruptcy, the cases were returned to their respective courts’ active dockets, and thereafter, all cases have been voluntarily dismissed due to the releases of further liability for such claims as provided by the Company’s approved bankruptcy plan. Regarding the Securities Class Action Litigation, the Company's insurance carriers remain on notice of these matters. The Company is currently involved in certain other litigation that arises in the ordinary course of business, most of which is expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. The Company records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, the Company accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, the Company discloses the nature and estimate of the possible loss of the litigation. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business or financial condition of the Company. Environmental Contingencies The Company evaluates potential loss contingencies related to environmental matters using the same criteria described above related to litigation matters. Based on current information, an unfavorable outcome concerning such environmental matters, both individually and in the aggregate, is considered to be reasonably possible. However, the Company believes its maximum potential exposure to loss would not be material to its results of operations or financial condition. The Company has a master insurance policy that provides coverage through 2022 for certain environmental claims up to $10,000 per occurrence and up to $50,000 in the aggregate, subject to deductibles and certain exclusions. At certain locations, individual policies are in place. Guarantees The Operating Partnership may guaranty the debt of a joint venture primarily because it allows the joint venture to obtain funding at a lower cost than could be obtained otherwise. This results in a higher return for the joint venture on its investment, and a higher return on the Operating Partnership's investment in the joint venture. The Operating Partnership may receive a fee from the joint venture for providing the guaranty. Additionally, when the Operating Partnership issues a guaranty, the terms of the joint venture agreement typically provide that the Operating Partnership may receive indemnification from the joint venture or have the ability to increase its ownership interest. The guarantees expire upon repayment of the debt, unless noted otherwise. The following table represents the Operating Partnership's guarantees of unconsolidated affiliates' debt as reflected in the Successor Company’s accompanying consolidated balance sheets as of December 31, 2021 and as reflected in the Predecessor Company’s accompanying consolidated balance sheets as of December 31, 2020:
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Successor |  |  |  | Predecessor |
|  | As of December 31, 2021 |  |  | Obligation recorded to reflect guaranty |  |  |  | Obligation recorded to reflect guaranty |
Unconsolidated Affiliate |  | Company's Ownership Interest |  |  | Outstanding Balance |  |  | Percentage Guaranteed by the Operating Partnership |  |  |  | Maximum Guaranteed Amount |  |  | Debt Maturity Date (1) |  |  | December 31, 2021 |  |  |  | December 31, 2020 |
West Melbourne I, LLC - Phase I |  | 50% |  |  | $ | 39,017 |  |  | 50% |  |  |  | $ | 19,509 |  |  | Feb-2025 | (2) |  | $ | 195 |  |  |  | $ | 201 |
West Melbourne I, LLC - Phase II |  | 50% |  |  |  | 13,893 |  |  | 50% |  |  |  |  | 6,947 |  |  | Feb-2025 | (2) |  |  | 69 |  |  |  |  | 72 |
Port Orange I, LLC |  | 50% |  |  |  | 51,548 |  |  | 50% |  |  |  |  | 25,774 |  |  | Feb-2025 | (2) |  |  | 258 |  |  |  |  | 266 |
Ambassador Infrastructure, LLC |  | 65% |  |  |  | 8,250 |  |  | 100% |  |  |  |  | 8,250 |  |  | Mar-2025 |  |  |  | 83 |  |  |  |  | 94 |
Shoppes at Eagle Point, LLC |  | 50% |  |  |  | 33,884 |  |  | 35% |  | (3) |  |  | 12,740 |  |  | Oct-2022 |  |  |  | 127 |  |  |  |  | 127 |
EastGate Storage, LLC (4) |  | —% |  |  |  | — |  |  | —% |  |  |  |  | — |  |  | N/A |  |  |  | — |  |  |  |  | 33 |
Self Storage at Mid Rivers, LLC (4) |  | —% |  |  |  | — |  |  | —% |  |  |  |  | — |  |  | N/A |  |  |  | — |  |  |  |  | 30 |
Parkdale Self Storage, LLC (4) |  | —% |  |  |  | — |  |  | —% |  |  |  |  | — |  |  | N/A |  |  |  | — |  |  |  |  | 65 |
Hamilton Place Self Storage, LLC (4) |  | —% |  |  |  | — |  |  | —% |  |  |  |  | — |  |  | N/A |  |  |  | — |  |  |  |  | 35 |
Atlanta Outlet JV, LLC |  | 50% |  |  |  | 4,471 |  |  | 100% |  |  |  |  | 4,471 |  |  | Nov-2023 |  |  |  | — |  |  |  |  | — |
Louisville Outlet Shoppes, LLC |  | 50% |  |  |  | 8,097 |  |  | 100% |  |  |  |  | 8,097 |  |  | Oct-2022 |  |  |  | — |  |  |  |  | — |
Total guaranty liability |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 732 |  |  |  | $ | 923 |
(1) | Excludes any extension options.
(2) | These loans have a one-year extension option at the joint venture’s election.
(3) | The guaranty is for a fixed amount of $12,740 throughout the term of the loan.
(4) | In December 2021, the property secured by the loan was sold. Proceeds from the transaction were used to pay off the outstanding amount of the loan. See Note 9 for additional information.
For the period from November 1, 2021 through December 31, 2021, the Successor Company evaluated each guarantee, listed in the table above, individually by looking at the debt service ratio, cash flow forecasts, the performance of each loan. The result of the analysis was that each loan is current. The Successor Company did not record a credit loss related to these guarantees for the period from November 1, 2021 through December 31, 2021. For the period from January 1, 2021 through October 31, 2021 and for the year ended December 31, 2020, the Predecessor Company evaluated each guarantee, listed in the table above, individually by looking at the debt service ratio, cash flow forecasts, the performance of each loan and, where applicable, the collateral value in relation to the outstanding amount of the loan. The result of the analysis was that each loan is current, performing and, where applicable, the collateral value was greater than the outstanding amount of the loan. The Predecessor Company did not record a credit loss related to these guarantees as of December 31, 2020.

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