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| Dear DailyWealth Subscriber,
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SUBJECT: Bankruptcy Probe:SUMMARY: I've spent the past 12 months investigating a potential bankruptcy that almost no one is paying attention to right now. More than 110,000 people across the U.S. stand to lose millions overnight – as early as April 30th. Bob Meeks of Bensalem, Pennsylvania, is one of them.FULL REPORT: Just outside of Philadelphia... in the suburbs of Bucks County, Pennsylvania... lies the township of Bensalem. There's nothing remarkable about Bensalem, except this small town is home to the Neshaminy Mall – one of the first malls ever constructed in the U.S., back in 1968. With 120 shops, 3 big department stores, a huge AMC theater, and dozens of eateries, this mall – like more than 1,500 malls across America – employs thousands of local people... People like Bob Meeks, the owner of a small portrait studio located in the mall. Bob is representative of every small business owner in America operating under corporate ownership. But what if on April 30th the Neshaminy Mall shut down – overnight? Imagine if every single store in the mall went dark. Small business owners like Bob... as well as hundreds of ordinary hard-working Americans employed as sales clerks, hair dressers, security guards, waiters, and ushers would be crushed. Yet, none of these folks has a clue how close they are to living this nightmare scenario right now. You see, the looming bankruptcy I'm talking about involves one of the biggest organizations in America – the owner of more than 200 malls in 44 states. About 12 months ago, while combing through Securities and Exchange Commission (SEC) documents, I discovered a suspicious discrepancy in the books of this powerful organization. Since then, I have spent my spare time... roughly 20 hours per week on average, including weekends... digging deeper into what I now believe will be one of the biggest bankruptcies in U.S. history, involving hundreds of malls and the lives of more than 110,000 people. Why should you care about this situation? Put simply, in the past, ordinary Americans have received big payouts for successfully identifying corporate failures. Thanks to a 1938 government ruling, if you make one simple phone call to put out a "warning" in the market about such situations, you could receive large payouts from SEC-regulated funds. For example... ** Gordon Bishop, a 51-year-old father of 3 from Milwaukee, made a single phone call to "alert" the market about the Enron fraud in 2000-2001. According to public estimates, he received a payout of more than $95,000 for his efforts.The point is, if you "alert" investors about this potential bankruptcy, you could collect thousands of dollars in extra cash this year. Don't worry, you won't have to call hundreds of people... sign petitions... or join any class-action law suits. All you have to do is make one 5-minute phone call within the next few days (I'll tell you exactly whom to call and what to say)... and you could receive cash payouts of up to $50,000 this year. Let me give you the full details...
The powerful mall owner I'm talking about is a company called General Growth Properties. You may not have heard of this gigantic organization, but you've almost certainly gone shopping in one of their malls across 44 states. A few months ago, I began scrutinizing the balance sheets, income and cash flow statements, 10-Ks, 10-Qs, 13-Fs, and Form 4 documents filed by this mall owner. Within minutes, I noticed something odd... In July 2008, a group of bankers transferred $1.5 BILLION in funds to General Growth: ** Then, just two months later, on September 19th... the CFO of General Growth wire transferred $22 million in company funds into his personal bank account.Why did these transactions seem suspicious to me? Well, here's the problem: The company as a whole earned just $26 million in 2008. But within the span of one week, this insider transferred about $50 million into his personal bank account. The numbers simply didn't add up. And he wasn't the only insider with suspicious transactions... ** On August 5th... the President of General Growth wire transferred $18.9 million in cash into his personal account. On September 25th... he transferred an additional $3.2 million.Something wasn't right: Bankers lent the company $1.5 billion in funds... millions of dollars ended up in the personal accounts of insiders... and less than 2% of that money showed up in the company's bottom line. The incredible thing is, no one on Wall Street seemed to care. Government regulators didn't notice. And worst of all, thousands of ordinary Americans who depend on jobs provided by the company's malls had no idea what was going on. But I wasn't the only one who suspected something was wrong.
"In 2002 Bernie Ebbers turned $1 billion in WorldCom stock into bankruptcy via margin, greed, and fraud... [The transactions at General Growth] triggered a memory of WorldCom." An Associated Press financial journalist "cautioned" that this situation is "likely to become the next economic crisis"; ABC News quoted an industry insider saying, "We've just never seen anything as bad as this." And Ashley Heher, a retail industry expert, publicly wrote that the events at this powerful mall owner could start "a domino effect that could ultimately cause some of the nation's favorite hangouts to go dark." You see, the suspicious events at General Growth boil down to one simple thing: A crushing mountain of debt. Company insiders – the perpetrators of this looming bankruptcy – were simply borrowing billions of dollars from banks every year... and wire transferring millions into their own accounts. For example, in 2007, they borrowed $2.5 BILLION. In 2006, they borrowed $2.85 BILLION. The company had no hope of EVER repaying this debt... considering that their profits for an entire year barely covered even 2% of the interest on this debt. Think about that... It's like borrowing $2 million to buy a house, even if you only earn $40,000 in income after taxes! It's completely unsustainable... a recipe for total disaster... But the bankers continued lending General Growth and its executives money, because... guess what... they got huge fees simply for making big loans. For example, a recent Bloomberg article on commercial property developers revealed that "many of the loans... earned the bank millions of dollars in fees." Bankers could earn as much as "$7.74 million in fees from [one] loan alone..." And at the end of the day, General Growth's clever accountants used ingenious techniques to make all their debt look like real assets. Bottom line: I'm not sure of too many things in the financial world right now, but I'm VERY sure that this company is about to go bankrupt. The sad part is, the perpetrators of this bankruptcy are most likely going to walk away from it with millions in the bank. Meanwhile, shareholders and hardworking folks at hundreds of malls around the country would be ruined.
Why this date? Quite simply, the banks are collapsing. And they want their money back. General Growth has a $200 million loan due on April 30th... and it has no hope of meeting this payment deadline. I suspect that's the breaking point. But the truth is, General Growth could go belly up at any moment. The company couldn't repay a $395 million loan that was due on March 16, and it has $4 billion due in total this year. In fact, state courts have already seized 4 of General Growth's malls: two in Texas, one in Louisiana, and one in California. I expect General Growth to declare bankruptcy on or around April 30th. But even if it survives that deadline, it can't avoid the hangman's gallows forever... "We do not have sufficient liquidity to pay these debts as they become due," the company admitted in fine print... buried in its 166-page SEC filing. Here's what this means for you: If you make one simple phone call within the next few days... you could be eligible to receive payouts of up to $50,000 this year. Let me show you how this is possible...
Nobody is talking about this mall crisis right now. The mainstream press is too caught up in the Obama "stimulus plan"... real estate troubles... and the collapsing financial system. But when thousands of Americans across the country begin losing their jobs OVERNIGHT – I can just about guarantee this story will be front-page news on every major paper in America. In fact, it's precisely for situations like these that the U.S. government set up what I refer to as an "Investor Alert System" back in 1938, just 4 years after the SEC was formed. Simply put, they created a mechanism through which ordinary American citizens could be rewarded for keeping tabs on private corporations. Here's how it works: The "Investor Alert System" ensures that you can study the books of any publicly-listed corporation. If you find any discrepancies, all you have to do is make one simple phone call. The phone call enters you into a special trade (it has nothing to do with options or any other complicated investment strategy) that sends a signal to the market indicating something is wrong with the corporation. Then, as soon as other investors recognize the discrepancies or outright fraud in a corporation's books... you receive a large payout from SEC-regulated funds as a reward for your efforts. In this way, the markets are constantly patrolled by private citizens like you and me. As The New York Times said, these private vigilantes "play an important role in the market, acting as contrarian voices amid all the Wall Street puffery, and serving as early warning signals for investors." Over the years, thousands of ordinary Americans have made generous profits by identifying corporate failures and entering into this special trade to "warn" others about it. For example... ** Drug fraud: $66,000 payoutSo, how exactly can you enter into this special trade to "alert" people about the looming bankruptcy of General Growth Properties – the powerful mall owner I've been telling you about? Well, before I answer that, there is one thing you need to know... Entering into this special trade can be extremely profitable. But I knew early on in my investigation that I could get in big trouble for predicting the bankruptcy of a large corporation – if I turned out to be wrong. I needed solid evidence to prove my case. And that's exactly what I set out to find. One of the first things I did to make sure I was on the right track was arrange a meeting with one of my most powerful contacts in the world...
This man is a former partner of legendary investor George Soros... and happens to be one of the savviest and wealthiest men in the world. I set up an appointment with him at the Intercontinental on Lexington Avenue in New York City. At the hotel, security was tight. All the doors were sealed, covered by police and tall, silent men wearing long coats and sunglasses. After about 20 minutes, my friend appeared. Despite his immense wealth, he is as humble and friendly as your favorite grandfather. He never mentioned the security. We caught up on the usual stuff – kids, families, investments. Then, he pulled out a notebook with detailed charts and numbers – with a full analysis of almost every large mall owner in the country.
You see, there are about half a dozen large organizations that own almost all the malls in America... and all of them are running the same unsustainable debt scheme. As my friend explained, General Growth is simply one of the largest and most heavily indebted mall owners. But when it collapses – as early as April 30th – the rest will likely fall apart like a house of cards... as investors realize that none of the other big mall owners can repay their debts either: ** California-based mall owner: These guys own around 100 regional and community shopping centers. But they owe more than $6 BILLION to bankers, and can barely cover even half the interest payments on this debt. Yet, insiders have been paying themselves millions of dollars every year.The point is, it's apparent to me that these mall owners will begin to collapse as soon as General Growth Properties declares bankruptcy. |
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