To bear those ills we have

Today's Wall Street Journal features an article about the dilemma facing creditors of commercial real estate giants, such as General Growth and Centro Properties, when commercial real estate loans come due and are not repaid: if the creditors act (by putting the borrower into bankruptcy), then some creditors believe that, "there is little to be gained and much to be lost through a bankruptcy," while others "might want to force a liquidation to receive a quicker payout."

Commentator Mike "Mish" Shedlock argues that, "The lenders are hoping that the credit market will improve. I have news for them: It won't." Mr. Shedlock might be correct; but I doubt that wishful thinking is the sole reason for what he calls "commercial real estate limbo." Another important factor is management capability, about which the Journal article has this to say:

Many creditors say that General Growth's management is doing a good job running the company. Its 200 U.S. malls, a portfolio second in size only to Simon Property Group Inc., generate enough cash to cover interest on the debt.

In a liquidation scenario, who manages those 200 malls? The purchasers, I suppose -- but what about malls for which there are no purchasers? Then it would be the creditors, I suppose -- but they have no such management capability.

All of which makes the creditors, like Hamlet,

"rather bear those ills we have
Than fly to others that we know not of."

Thanks to Jim Quinn of TheBurningPlatform.com for alerting me to the issue via email.