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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Secured Notes Measured at Fair Value

The following table sets forth information regarding the Successor’s Secured Notes that were measured at fair value:

Debt Instrument		Carrying amount as of December 31, 2021				Change in fair value ⁽¹⁾				Fair value as of December 31, 2021 ⁽²⁾
10% Senior Secured Notes		$	395,000			$	395			$	395,395

(1)	As of December 31, 2021, the change in fair value is included within “Interest Expense” in the Successor Company’s consolidated income statement.

(2)	The fair value was calculated using Level 1 inputs.

Schedule of Debt Securities, Available-for-sale Measured at Fair Value

The following table sets forth information regarding the Company’s AFS securities that were measure at fair value:

AFS Security

Amortized

Cost ⁽¹⁾

Allowance

for credit

losses ⁽²⁾

Total unrealized gain

Fair value as of December 31, 2021

U.S. Treasury securities

149,999

—

)

149,996

(1)	The U.S. Treasury securities have maturities through February 2022. Subsequent to December 31, 2021, the Company used funds from its matured U.S. Treasury securities to purchase additional U.S. Treasury securities. See Note 20 for additional information.

(2)

U.S Treasury securities have a long history with no credit losses. Additionally, the Company notes that U.S Treasury securities are explicitly fully guaranteed by a sovereign entity that can print its own currency and that the sovereign entity’s currency is routinely held by central banks and other major financial institutions, is used in international commerce, and commonly viewed as a reserve currency, all of which qualitatively indicate that historical credit loss information should be minimally affected by current conditions and reasonable and supportable forecasts. Therefore, the Successor Company did not record expected credit losses for its U.S Treasury securities for the period from November 1, 2021 through December 31, 2021 and the Predecessor Company did not record expected credit losses for its U.S. Treasury securities for the period from January 1, 2021 through October 31, 2021.

The following table sets forth information regarding the Predecessor Company’s AFS securities that were measured at fair value for the year ended December 31, 2020:

AFS Security

Amortized

Cost

Allowance

for credit

losses ⁽¹⁾

Total unrealized gain

Fair value as of December 31, 2020

U.S. Treasury securities

233,053

—

233,071

(1)

U.S Treasury securities have a long history with no credit losses. Additionally, the Company notes that U.S Treasury securities are explicitly fully guaranteed by a sovereign entity that can print its own currency and that the sovereign entity’s currency is routinely held by central banks and other major financial institutions, is used in international commerce, and commonly viewed as a reserve currency, all of which qualitatively indicate that historical credit loss information should be minimally affected by current conditions and reasonable and supportable forecasts. Therefore, the Predecessor Company did not record expected credit losses for its U.S Treasury securities for the year ended December 31, 2020.

Schedule of Assets Measured at Fair Value on Nonrecurring Basis

See Note 3 for information regarding the fair value adjustments associated with Fresh Start Accounting.

The following table sets forth information regarding the Predecessor Company’s assets that were measured at fair value on a nonrecurring basis and related impairment charges for the period from January 1, 2021 through October 31, 2021 and the year ended December 31, 2020, respectively:

			Fair Value Measurements at Reporting Date Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Loss on Impairment
Period from January 1, 2021 through October 31, 2021
Long-lived assets	$	120,290	$	—	$	—	$	120,290	$	146,781
Year Ended December 31, 2020
Long-lived assets	$	268,830	$	—	$	—	$	268,830	$	213,358

Schedule of Impairment on Real Estate Properties

During the period from January 1, 2021 through October 31, 2021, the Predecessor Company recognized impairments of real estate of $146,781 related to five malls, a redeveloped anchor parcel, an outlet center, an open-air center, an outparcel and vacant land. The Properties were classified for segment reporting purposes as listed below. See Note 13 for segment information.

Impairment

Date

Property

Location

Segment

Classification

Loss on

Impairment

Fair

Value

March

Eastland Mall ⁽¹⁾

Bloomington, IL

Malls

13,243

10,700

March

Old Hickory Mall ⁽²⁾

Jackson, TN

Malls

20,149

12,400

March

Stroud Mall ⁽³⁾

Stroudsburg, PA

Malls

23,790

15,400

July

The Landing at Arbor Place - Outparcel ⁽⁴⁾

Douglasville, GA

All Other

1,682

590

September

Laurel Park Place ⁽⁵⁾

Livonia, MI

Malls

14,267

9,800

September

Parkdale Mall and Crossing ⁽⁶⁾

Beaumont, TX

Malls/All Other

47,211

50,500

October

The Outlet Shoppes at Gettysburg ⁽⁷⁾

Gettysburg, PA

Malls

21,470

16,660

October

Vacant land ⁽⁸⁾

El Centro, CA

All Other

4,969

4,240

146,781

120,290

(1)

In accordance with the Company's quarterly impairment process, the Predecessor Company wrote down the book value of the mall to its estimated fair value of $10,700. The mall had experienced a decline in cash flows due to store closures and rent reductions. Management determined the fair value of Eastland Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of nine years, with a sale at the end of the holding period, a capitalization rate of 14.0% and a discount rate of 15.0%.

(2)

In accordance with the Company's quarterly impairment process, the Predecessor Company wrote down the book value of the mall to its estimated fair value of $12,400. The mall had experienced a decline in cash flows due to store closures and rent reductions. Management determined the fair value of Old Hickory Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of nine years, with a sale at the end of the holding period, a capitalization rate of 13.0% and a discount rate of 14.0%.

(3)

In accordance with the Company's quarterly impairment process, the Predecessor Company wrote down the book value of the mall to its estimated fair value of $15,400. The mall had experienced a decline in cash flows due to store closures and rent reductions. Management determined the fair value of Stroud Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of nine years, with a sale at the end of the holding period, a capitalization rate of 11.75% and a discount rate of 12.5%.

(4)	In July 2021, the Predecessor Company sold an outparcel at The Landing at Arbor Place. Sales proceeds amounted to $590, which resulted in a loss on sale.

(5)

In accordance with the Company's quarterly impairment process, the Predecessor Company wrote down the book value of the mall to its estimated fair value of $9,800. The mall had experienced a decline in cash flows due to store closures and rent reductions. Management determined the fair value of Laurel Park Place using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of nine years, with a sale at the end of the holding period, a capitalization rate of 11.5% and a discount rate of 13.0%.

(6)

In accordance with the Company’s quarterly impairment process, the Predecessor Company wrote down the book value of the mall, a redeveloped anchor parcel and an open-air center adjacent to the mall to their aggregate estimated fair value of $50,500. The mall had experienced a decline in cash flows due to store closures and rent reductions. These factors resulted in a reduction of the expected hold period for the mall and open-air center (excluding the redeveloped anchor parcel) based on Management’s assessment that there was an increased likelihood that the loan secured by the mall and open-air center may not be successfully restructured or refinanced. Management determined the fair value of Parkdale Mall, Parkdale Crossing and Parkdale Anchor using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a weighted-average capitalization rate of 12.3% and a weighted-average discount rate of 14.2%.

(7)	In accordance with the Company’s quarterly impairment process, the Predecessor Company wrote down the book value of the outlet center to its estimated fair value of $16,660. The outlet center had experienced a decline in cash flow due to store closures and rent reductions. Management

determined the fair value of The Shoppes of Gettysburg using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of nine years, with a sale at the end of the holding period, a capitalization rate of 11.0% and a discount rate of 12.0%.

(8)	In accordance with the Company’s quarterly impairment process, the Predecessor Company wrote down the book value of land to its estimated fair value of $4,240. The Company evaluated comparable land parcel transactions and determined that $4,240 was the land’s estimated fair value.

During the period from November 1, 2021 through December 31, 2021, the Successor Company adjusted the negative equity in EastGate Mall to zero upon deconsolidation, which represents the estimated fair value of the Successor Company’s investment in that property. During the period from January 1, 2021 through October 31, 2021, the Predecessor Company adjusted the combined negative equity in Asheville Mall and Park Plaza to zero upon deconsolidation, which represents the estimated fair values of the Company’s investments in these properties. See Note 9 for additional information.

Long-lived Assets Measured at Fair Value in 2020

During the year ended December 31, 2020, the Predecessor Company recognized impairments of real estate of $213,358 related to six malls and one vacant land parcel. The Properties were classified for segment reporting purposes as listed below (see section below for information on outparcels). See Note 13 for segment information.

Impairment

Date

Property

Location

Segment

Classification

Loss on

Impairment

Fair

Value

March

Burnsville Center ⁽¹⁾

Burnsville, MN

Malls

26,562

47,300

March

Monroeville Mall ⁽²⁾

Pittsburgh, PA

Malls

107,082

67,000

June

Asheville Mall ⁽³⁾

Asheville, NC

Malls

13,274

52,600

July

Vacant land

Pittsburgh, PA

Malls

—

December

EastGate Mall ⁽⁴⁾

Cincinnati, OH

Malls

5,980

16,530

December

Greenbrier Mall ⁽⁵⁾

Chesapeake, VA

Malls

8,923

42,500

December

The Outlet Shoppes at Laredo ⁽⁶⁾

Laredo, TX

Malls

51,491

42,900

213,358

268,830

(1)

In accordance with the Company's quarterly impairment process, the Predecessor Company wrote down the book value of the mall to its estimated fair value of $47,300. The mall had experienced a decline in cash flows due to store closures and rent reductions. These factors resulted in a reduction of the expected hold period for this asset based on Management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. Management determined the fair value of Burnsville Center using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a capitalization rate of 14.5% and a discount rate of 15.5%.

(2)

In accordance with the Company's quarterly impairment process, the Predecessor Company wrote down the book value of the mall to its estimated fair value of $67,000. The mall had experienced a decline in cash flows due to store closures and rent reductions. Management determined the fair value of Monroeville Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a capitalization rate of 14.0% and a discount rate of 14.5%.

(3)

In accordance with the Company's quarterly impairment process, the Predecessor Company wrote down the book value of the mall to its estimated fair value of $52,600. The mall had experienced a decline in cash flows due to store closures and rent reductions. These factors resulted in a reduction of the expected hold period for this asset based on Management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. Management determined the fair value of Asheville Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a capitalization rate of 13.25% and a discount rate of 14.0%.

(4)

In accordance with the Company's quarterly impairment process, the Predecessor Company wrote down the book value of the mall to its estimated fair value of $16,530. The mall had experienced a decline in cash flows due to store closures and rent reductions. The Predecessor Company expects to convey the property to the lender. Management determined the fair value of EastGate Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a capitalization rate of 17.0% and a discount rate of 18.0%.

(5)

In accordance with the Company's quarterly impairment process, the Predecessor Company wrote down the book value of the mall to its estimated fair value of $42,500. The mall had experienced a decline in cash flows due to store closures and rent reductions. These factors resulted in a reduction of the expected hold period for this asset based on Management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. Management determined the fair value of Greenbrier Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a capitalization rate of 12.5% and a discount rate of 13.0%.

(6)

In accordance with the Company's quarterly impairment process, the Predecessor Company wrote down the book value of the mall to its estimated fair value of $42,900. The mall had experienced a decline in cash flows due to store closures and rent reductions. These factors resulted in a reduction of the expected hold period for this asset based on Management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. Management determined the fair value of The Outlet Shoppes at Laredo using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a capitalization rate of 8.5% and a discount rate of 9.0%.

Long-lived Assets Measured at Fair Value in 2019

During the year ended December 31, 2019, the Company recognized impairments of real estate of $239,521 primarily related to six malls and an open-air center. The Properties were classified for segment reporting purposes as listed below (see section below for information on outparcels). See Note 13 for segment information.

Impairment

Date

Property

Location

Segment

Classification

Loss on

Impairment

Fair

Value

March

Greenbrier Mall ⁽¹⁾

Chesapeake, VA

Malls

22,770

56,300

March/April

Honey Creek Mall ⁽²⁾

Terre Haute, IN

Malls

2,045

—

June

The Forum at Grandview ⁽³⁾

Madison, MS

All Other

8,582

—

June

EastGate Mall ⁽⁴⁾

Cincinnati, OH

Malls

33,265

25,100

September

Mid Rivers Mall ⁽⁵⁾

St. Peters, MO

Malls

83,621

53,340

September

Laurel Park Place ⁽⁶⁾

Livonia, MI

Malls

52,067

26,000

December

Park Plaza Mall ⁽⁷⁾

Little Rock, AR

Malls

37,400

39,000

January/March

Other adjustments ⁽⁸⁾

Various

Malls

(229

)

—

239,521

199,740

(1)

In accordance with the Company's quarterly impairment process, the Predecessor Company wrote down the book value of the mall to its estimated fair value of $56,300. The mall has experienced a decline in cash flows due to store closures and rent reductions. Additionally, one anchor was vacant as of the date of impairment. These factors resulted in a reduction of the expected hold period for this asset based on Management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. Management determined the fair value of Greenbrier Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a capitalization rate of 11.5% and a discount rate of 11.5%.

(2)	The Predecessor Company adjusted the book value of the mall to the net sales price of $14,360 based on a signed contract with a third-party buyer, adjusted to reflect estimated disposition costs. The mall was sold in April 2019. See Note 8 for additional information.

(3)	The Predecessor Company adjusted the book value to the net sales price of $31,559 based on a signed contract with a third-party buyer, adjusted to reflect estimated disposition costs. The property was sold in July 2019. See Note 8 for additional information.

(4)

In accordance with the Company's quarterly impairment process, the Predecessor Company wrote down the book value of the mall to its estimated fair value of $25,100. The mall had experienced a decline in cash flows due to store closures and rent reductions. These factors resulted in a reduction of the expected hold period for this asset based on Management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. Management determined the fair value of EastGate Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a capitalization rate of 14.5% and a discount rate of 15.0%.

(5)

In accordance with the Company's quarterly impairment process, the Predecessor Company wrote down the book value of the mall to its estimated fair value of $53,340. The mall has experienced a decline in cash flows due to store closures and rent reductions. Management determined the fair value of Mid Rivers Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a capitalization rate of 12.5% and a discount rate of 13.25%.

(6)

In accordance with the Company's quarterly impairment process, the Predecessor Company wrote down the book value of the mall to its estimated fair value of $26,000. The mall had experienced a decline in cash flows due to store closures and rent reductions. Management determined the fair value of Laurel Park Place using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a capitalization rate of 13.5% and a discount rate of 14.0%.

(7)

In accordance with the Company's quarterly impairment process, the Predecessor Company wrote down the book value of the mall to its estimated fair value of $39,000. The mall had experienced a decline of NOI due to store closures and rent reductions. These factors resulted in a reduction of the expected hold period for this asset based on Management’s assessment that there was an increased likelihood that the loan secured by the mall may not be successfully restructured or refinanced. Management determined the fair value of Park Plaza Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a capitalization rate of 13.0% and a discount rate of 14.0%.

(8)	Related to true-ups of estimated expenses to actual expenses for properties sold in prior periods.