LOS ANGELES » General Growth Properties Inc. said yesterday a bankruptcy judge has approved its reorganization plan, clearing the way for the nation’s second-largest shopping mall owner to emerge from Chapter 11 bankruptcy protection early next month.

U.S. Bankruptcy Court Judge Allan Gropper in New York confirmed the Chicago-based company’s plan. General Growth expects to conclude its restructuring on Nov. 8, bringing to a close the largest real estate bankruptcy case in U.S. history.

"The confirmation of our plan is an important milestone as we lay the groundwork for a successful future for (General Growth)," said CEO Adam Metz. "We are now prepared to begin a new era for GGP on firm financial footing."

General Growth sought bankruptcy protection in April 2009 under the weight of nearly $28 billion in liabilities, much of it racked up during the real estate boom years as the company seized on cheap lending to bankroll acquisitions. The U.S. financial crisis pushed it over the edge, all but drying up companies’ access to capital to refinance debts.

Now it will emerge with $6.8 billion in equity commitments and having restructured and extended $15 billion in debt. All creditors will be paid in full — a rare outcome in bankruptcy cases.

Shareholders will own stock in two separate companies — General Growth and a newly formed company called the Howard Hughes Corp., which will own General Growth’s portfolio of planned communities and other real estate development opportunities.

General Growth will exit bankruptcy with more than 185 regional malls in 43 states — a retail portfolio second only to Indianapolis-based Simon Property Group Inc., which failed in its bid to scoop up its rival earlier this year.

Instead, General Growth aligned itself with an investor group comprised of Canadian property manager Brookfield Asset Management Inc., the Fairholme Fund, Pershing Square Capital Management, Blackstone and the Teacher Retirement System of Texas.

The consortium agreed to provide the capital to finance General Growth’s exit from bankruptcy and will help shape the restructured company’s direction and leadership.

Last month the company said Metz and Chief Operating Officer Thomas Nolan had agreed to remain in their roles at the company for up to one year following the completion of the company’s restructuring.

A new board, which will take over once General Growth exits bankruptcy protection, is expected to choose a new management team during the transition.

Meanwhile, Pershing Square Capital Management CEO William A. Ackman will be named chairman of the Hughes spinoff, part of a nine-member board.

Under the terms of its restructuring plan, General Growth won’t have any secured mortgage loans due before Jan. 1, 2014, although some of its debt associated with joint venture properties excluded from the bankruptcy are scheduled to come due earlier.

General Growth’s financing agreement with its investor group also includes a provision that gives the mall owner the option to replace up to $2.15 billion in capital with the proceeds of equity issued at a more favorable price.

The company has already filed documents with the Securities and Exchange Commission to raise equity shortly after it exits bankruptcy protection.

Shares fell 43 cents to close at $16.93 yesterday.