The owner of the Chautauqua Mall may be forced to file for Chapter 11 bankruptcy protection, according to Bloomberg News.

Last month, Washington Prime missed a $23 million interest payment, which began a 30-day grace period for the company to negotiate its debt with lenders. Bloomberg News reporters spoke with someone familiar with the conversations who said those talks “have since been faltering.” Washington Prime Group officials did not respond to Bloomberg News’ requests for comment. Bankruptcy could be avoided if Washington Prime makes progress with its lenders or if its grace period is extended. The news sent Washington Prime stock tumbling again Thursday to about 80% of its value from a year ago.

Washington Prime Group was formed in 2014 following a spinoff from the Simon Property Group. It operates roughly 100 malls across the country, including the Chautauqua Mall. The Chautauqua Mall has struggled through the loss of three anchor tenants in the past several years, including Sears, Bon-Ton and Office Max. The mall has pivoted toward Planet Fitness and restaurants like Sakura Buffet to add tenants as retail stores struggled even before the COVID-19 pandemic. The Chautauqua Mall also got some good news that Ollie’s Bargain Outlet will be taking over the space previously leased by Office Max. Ollie’s is expected to open in mid-October.

“It became crystal clear we couldn’t sit on our hands waiting for the usual suspects to occupy space nor were we going to regain our guests’ respect by superficial measures,” Lou Conforti, Washington Prime Group CEO, said to industry analysts during a conference call in November. “It was going to require a fundamental shift as to how we regard our role as landlord. And by this, I mean, a proactive operator which requires diversifying tenancy, activated common area, and delivering relevant adaptive reuse projects. … But then COVID-19 rears its ugly head. While it’s certainly one heck of a blow, it’s not a knockout punch and it actually strengthened our company’s conviction about our guests and our locations.”

While 18 current adaptive reuse projects are still slated to open, seven are delayed. Washington Prime finished the third quarter with $112 million of cash on hand and anticipated finishing 2020 with $125 to $135 million of liquidity.

Mark Yale, Washington Prime CFO, told analysts during the November conference call that the company even then was working with debt investors to de-leverage its balance sheet — though both Yale and Conforti were quick to say the measures did not involve a restructuring support agreement or the start of any sort of bankruptcy proceeding.

“Now when considering the uncertainty associated with COVID, significant risks exist to any forecasting in the current environment. Notwithstanding based upon our current projections and the positive impact from the potential de-leveraging measures described above, we believe the company should have the necessary flexibility that will allow us to navigate and maintain compliance with both our modified credit facilities and bond covenants for the foreseeable future,” Yale said. “For covenant forecasting purposes, this assumes a slow recovery with continued pressure from the pandemic, but that our properties do remain open and are not significantly impacted by any future government mandated operating restrictions.”