The Bangor Mall suffered another blow last week when a Maine Superior Court judge ruled it should be placed under control of a receiver that will effectively take over the mall and run its business.
What the July 17 decision means for the mall’s future remains a question, although the receiver could potentially improve and sell the mall or move it into foreclosure.
For now, the ruling means that the Bangor Mall has to surrender the possession of all property to the receiver immediately, as well as any rent or other money it still has on hand. The receiver also has the right to determine whether to keep current staff and contractors.
Superior Court Justice Ann Murray approved the request dated July 5 and filed with the Penobscot County Superior Court by MSCI 2007-IQ16 Stillwater Avenue LLC.
MSCI is a company formed in Maine in January 2018 to handle the mall’s property on behalf of the trustees of an $80 million loan on which its owner, Simon Property of Indianapolis, defaulted. Under the ruling, it also is the new owner of the mall.
The mall has lost two key anchor tenants, Sears and Macy’s, during the past year in addition to other smaller stores at a time when malls across the country are losing business to online shoppers.
MSCI asked the Penobscot County Superior Court in Bangor to appoint a receiver to handle the mall’s property, rents and other items of value covered under the loan agreement.
Stephanie Williams, the attorney at Duane Morris LLP in Portland who filed the complaint for MSCI, was not immediately available to comment on what Murray’s decision might mean for the Bangor Mall’s future.
In her ruling, Murray agreed with the request by MSCI and Williams to appoint The Woodmont Co. of Fort Worth, Texas, as the receiver, as it has had previous experience with troubled malls.
The court documents specify that Woodmont will have full possession of the property subject to the mortgage loan, and shall have full power and authority to operate, manage, protect and conserve the property. That includes getting tenants and leases for the mall with the approval of MSCI.
The receiver also can collect rents, insurance claim proceeds and other money, and employ managers, leasing agents, construction workers and others for the property. Any repair costs that total more than $5,000 will need the approval of MSCI.
The receivership is due to end on Jan. 15, 2019. No date was given for a decision on the disposition of the mall.
Woodmont’s management fee will be 2.25 percent of gross collected revenues or $6,500 per month, whichever is more. It the mall is sold, it will get an extra one-month fee.
There are other incentives for Woodmont. It will get $125 for each permanent lease agreement and 5 percent of the total construction cost for supervising tenant or capital improvement work for all construction contracts above $25,000 and for the first $100,000 of total construction costs. After that it will get 3 percent of costs above $100,000.
The ruling also says the receiver and its employees will not be personally liable in their receiver duties.
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