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Mall Owners File Ch. 11 to Regain Control

SAN FRANCISCO-The owners of the 1.2 million-sf Vallco Mall in Cupertino, CA, file for protection from creditors under Chapter 11 of the US Bankruptcy Code.

By Brian K. Miller | Updated on September 05, 2008

SAN FRANCISCO-The Owners of Cupertino Square, formerly Vallco Mall, the largest indoor mall in Cupertino, CA, have filed for protection from creditors under Chapter 11 of the US Bankruptcy Code. The move wrests control of the 1.2 million-sf shopping center from lender Gramercy Capital Corp., which had taken control of the property in June through litigation and had threatened to sell the property at auction on Sept. 10.

A nearly $200-million loan taken out in 2006 to reposition the property is secured by the mall. In an August notice of default and sale Gramercy said the mall owners owed it and its lending partner, United Commercial Bank, approximately $121 million. Three months earlier, Gramercy filed a notice with the county claiming that the mall was in default to the tune of $1.6 million, according to published reports.

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