Washington Prime Group, owner of the Chautauqua Mall, is not expected to make its $23.5 million interest payment by the end of its 30-day grace period.

The owner of the Chautauqua Mall has been given an additional two weeks to restructure its debt – but the company’s latest earning statement raises doubts about the company’s future without a Chapter 11 reorganization.

Washington Prime Group skipped a $23.5 million interest payment that was due Feb. 15 and didn’t expect to make the payment at the end of its 30-day grace period. The forebearance agreement was set to expire March 31, but has now been extended to April 14.

“The company is continuing to engage in negotiations and discussions to restructure its capital structure,” Washington Prime Group officials stated in the company’s fourth quarter earnings statement. “The uncertainty associated with the company’s ability to meet these obligations as they become due raises substantial doubt about the company’s ability to continue as a going concern as defined by generally accepted accounting principles.”

Bloomberg News reported March 22 that Washington Prime has approached investors to sound out interest in providing bankruptcy financing as the company prepares to file for Chapter 11. The real estate investment trust, which owns about 100 malls throughout the U.S., acknowledged that it may have to file for court protection from creditors amid “substantial doubt” about its ability to keep operating. Bloomberg News previously reported that Washington Prime was contemplating bankruptcy. Bloomberg is reporting that Guggenheim, Washington Prime Group’s investment bank, has asked prospective lenders to indicate interest in $150 million debtor-in-possession loan.

“The aforementioned discussions have included negotiations of the terms and conditions of a financial restructuring of the existing debt of, existing equity interests in, and certain other obligations of the company and certain of its direct and indirect subsidiaries,” the company noted in its earnings statement. “The restructuring may need to be implemented in cases commenced under chapter 11 of the United States Bankruptcy Code. Although the company continues to be open to all discussions with the holders of the notes and its other stakeholders regarding a potential restructuring, there can be no assurance the company will reach an agreement regarding a restructuring in a timely manner, on terms that are attractive to the company, or at all. The company expects to continue to provide quality service to its customers without interruption and work with its business partners as usual during the course of these discussions and any potential transaction.”

According to the company’s fourth quarter earnings statement released March 16, net loss attributable to common shareholders for the fourth quarter of 2020 was $111.4 million compared to net earnings of $17.1 million in the fourth quarter of 2019. The company ended 2020 with $111 million in cash and cash equivalents including its share of unconsolidated properties.

The year-over-year difference relates primarily to the impacts of tenant lease modifications and increased bad debt expense related to delinquent receivables during the fourth quarter of 2020 due to the ongoing COVID-19 pandemic. Year-over-year revenue decreased by $20.7 million. Washington Prime Group officials suspended first quarter dividends on common shares of stock and operating partnership units. The company is also not providing 2021 guidance and will not host an earnings conference call this quarter.

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 while adding a new outparcel development in Taco Bell. 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.