In a recent ruling declining to dismiss the Chapter 11 cases of several subsidiaries of General Growth Properties ("GGP"), the U.S. Bankruptcy Court for the Southern District of New York demonstrated that special purpose entities ("SPEs"), designed to avoid bankruptcy, can nonetheless be subject to bankruptcy proceedings.

Like other parts of the economy outside the immediate context of the banking and financial system, the commercial real estate industry so far has felt the impact of current economic woes principally in the form of dramatically tightened credit markets.