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Fresh Start Accounting (Tables)

12 Months Ended

Dec. 31, 2023

Reconciliation of Enterprise and Reorganization Value

The following table reconciles the enterprise value to the estimated fair value of the Successor’s common shares as of the Effective Date:


Enterprise value, less cash	$	2,296,872
Less: Fair value of noncontrolling interest in consolidated subsidiaries		(6,087	)
Enterprise value of the Company's interests, less cash		2,290,785
Plus: Cash, cash equivalents and restricted cash		330,282
Less: Fair value of mortgage and other indebtedness		(1,678,619	)
Less: Fair value of 10% senior secured notes		(395,000	)
Fair value of Successor total shareholders' equity	$	547,448
Shares and units issued upon emergence		20,000,000
Per share value	$	27.37

The following table reconciles the enterprise value to the reorganization value of the Successor’s assets to be allocated to the Company’s individual assets as of the Effective Date:


Enterprise value, less cash	$	2,296,872
Plus: Cash, cash equivalents and restricted cash		330,282
Plus: Accounts payable and accrued liabilities		335,513
Reorganization value of Successor's assets	$	2,962,667

Summary of Fresh Start Adjustments

The adjustments included in the following fresh start consolidated balance sheet reflect the effects of the transactions contemplated by the Plan and executed by the Company on the Effective Date (reflected in the column “Reorganization Adjustments”), and fair value and other required accounting adjustments resulting from the adoption of fresh start accounting (reflected in the column “Fresh Start Accounting Adjustments”). The explanatory notes provide additional information regarding the adjustments recorded.


	October 31, 2021
	Predecessor			Reorganization Adjustments				Fresh Start Accounting Adjustments				Successor
ASSETS (1)
Real estate assets:
Land	$	625,098		$	—			$	(23,083	)	(15)	$	602,015
Buildings and improvements		4,839,923			—				(3,660,465	)	(15)		1,179,458
		5,465,021			—				(3,683,548	)			1,781,473
Accumulated depreciation		(2,252,275	)		—				2,252,275		(15)		—
		3,212,746			—				(1,431,273	)			1,781,473
Developments in progress		15,858			—				—				15,858
Net investment in real estate assets		3,228,604			—				(1,431,273	)			1,797,331
Cash and cash equivalents		498,260			(238,053	)	(1)		—				260,207
Receivables:
Tenant		70,664			—				(49,751	)	(16)		20,913
Other		4,056			1,254		(2)		—				5,310
Mortgage and other notes receivable		397			—				—				397
Investments in unconsolidated affiliates		246,823			—				(124,982	)	(17)		121,841
In-place leases, net		6,895			—				406,635		(18)		413,530
Above market leases, net		3,611			—				241,385		(18)		244,996
Intangible lease assets and other assets		150,784			—				(52,642	)	(19)		98,142
	$	4,210,094		$	(236,799	)		$	(1,010,628	)		$	2,962,667
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgage and other indebtedness, net	$	1,016,557		$	1,032,508		(3)	$	(370,446	)	(20)	$	1,678,619
10% senior secured notes - at fair value (carrying amount of $395,000 as of October 31, 2021)		—			395,000		(4)		—				395,000
Below market leases, net		5,576			—				153,667		(18)		159,243
Accounts payable and accrued liabilities		215,675			(7,431	)	(5)		(31,974	)	(21)		176,270
Total liabilities not subject to compromise (1)		1,237,808			1,420,077				(248,753	)			2,409,132

Liabilities subject to compromise		2,551,439			(2,551,439	)	(6)		—				—

Commitments and contingencies
Redeemable noncontrolling interests		(1,032	)		1,032		(7)		—				—
Shareholders' equity:
Successor common stock, $.001 par value, 200,000,000 shares authorized, 20,774,716 issued and outstanding in 2021		—		20			(8)		—				20
Predecessor preferred stock, $.01 par value, 15,000,000 shares authorized:
7.375% Series D Cumulative Redeemable Preferred Stock, 1,815,000 shares outstanding in 2020		18			(18	)	(9)		—				—
6.625% Series E Cumulative Redeemable Preferred Stock, 690,000 shares outstanding in 2020		7			(7	)	(10)		—				—
Predecessor common stock, $.01 par value, 350,000,000 shares authorized, 196,569,917 issued and outstanding in 2020		1,976			(1,976	)	(11)		—				—
Additional paid-in capital		1,986,769			487,721		(12)		(1,927,062	)	(22)		547,428
Retained earnings (dividends in excess of cumulative earnings)		(1,553,835	)		405,864		(13)		1,147,971		(22)		—
Total shareholders' equity		434,935			891,604				(779,091	)			547,448
Noncontrolling interests		(13,056	)		1,927		(14)		17,216		(23)		6,087
Total equity		421,879			893,531				(761,875	)			553,535
	$	4,210,094		$	(236,799	)		$	(1,010,628	)		$	2,962,667

(1)

The following summarizes the change in cash and cash equivalents:


Proceeds from exchangeable notes	$	50,000
Payment for the settlement to allowed unsecured claim holders		(98,801	)
Payment for the settlement of the Predecessor secured credit facility		(100,000	)
Payment of deferred financing fees for the exit credit agreement		(1,192	)
Payment of expensed financing fees for the exchangeable notes and the secured notes		(773	)
Payment of professional fees		(27,170	)
Redemption of secured notes		(60,117	)
	$	(238,053	)

(2)

Represents a receivable related to an overpayment of professional fees on the Effective Date.

(3)

The Plan’s reorganization adjustments in mortgage and other indebtedness, net, were as follows:


Issuance of exit credit agreement	$	883,700
Issuance of exchangeable notes		150,000
Capitalization of deferred financing costs related to the exit credit agreement		(1,192	)
	$	1,032,508

(4)

Represents the issuance of the $455,000 secured notes and the subsequent $60,000 redemption on the secured notes.

(5)

The decrease in accounts payable and accrued liabilities represents the write-off of an existing liability related to Predecessor preferred shares.

(6)

Represents the settlement of liabilities subject to compromise in accordance with the Plan as follows:


Liabilities subject to compromise	$	2,551,439
Issuance of exit credit agreement		(983,700	)
Issuance of secured notes		(555,773	)
Equity issued on the Effective Date in settlement of liabilities subject to compromise		(487,479	)
Payment to various creditors		(102,060	)
Gain on settlement of liabilities subject to compromise	$	422,427

(7)

Represents the cancellation of Predecessor redeemable noncontrolling interests.

(8)

Represents the issuance of Successor equity.

(9)

Represents the cancellation of Predecessor Series D Preferred Stock.

(10)

Represents the cancellation of Predecessor Series E Preferred Stock.

(11)

The net change in Predecessor common stock is due to:


Conversion of Predecessor equity	$	20
Cancellation of Predecessor common stock		(1,996	)
Net change in Predecessor common stock	$	(1,976	)

(12)

The following summarizes the change in additional paid-in capital:


Issuance of Successor common stock to creditors	$	487,462
Issuance of Successor common stock to Predecessor equity holders		(2	)
Cancellation of Predecessor common stock and preferred stock		2,021
Other adjustments		(1,760	)
	$	487,721

(13)

The following summarizes the change in dividends in excess of cumulative earnings:


Gain on settlement of liabilities subject to compromise	$	422,427
Payment of certain professional fees		(16,563	)
	$	405,864

(14)

Represents fresh start accounting adjustments to noncontrolling ownership interests.

(15)

Represents fair value adjustments to net investment in real estate assets.

(16)

Represents the elimination of Predecessor straight-line rent receivables.

(17)

Represents fair value adjustments to the Company’s investment in unconsolidated affiliates.

(18)

Represents the fair value adjustment to intangible lease assets.

(19)

The following summarizes the fair value adjustments, net, in intangible lease assets and other assets:


Intangible lease assets	$	(52,761	)
Corporate assets		293
Right-of-use lease assets		(174	)
	$	(52,642	)

(20)

Represents fair value adjustments of $373,542 related to property-level debt, as well as the write-off of $3,096 in unamortized property-level deferred financing costs.

(21)

The following summarizes the fair value adjustments, net, in accounts payable and accrued liabilities:


Investment in unconsolidated affiliates	$	(31,682	)
Write-off of deferred revenue		(91	)
Lease liabilities		(201	)
	$	(31,974	)

(22)

Represents the cumulative effect of fresh start accounting adjustments discussed herein, including additional paid-in capital of approximately $60,000 to Predecessor shareholders and common unitholders, and the elimination of the Predecessor accumulated deficit.

(23)

Represents fresh start accounting adjustments to noncontrolling ownership interests.