The second largest U.S. mall owner may be filing for Chapter 11 bankruptcy. Last Friday, General Growth Properties Inc. defaulted on their $900 million debt to the Bank of America Corp., Deutsche Bank AG, Citigroup Inc., and Wachovia Corp.

The company owns 200-plus malls, including The Natick Collection in Natick, Faneuil Hall in Boston, Water Tower Place in Chicago, and Fashion Show mall in Las Vegas.

Junior Maggie Davis says it would be too bad if The Natick Collection, a go-to place for Wayland shoppers, ultimately failed, “It’s understandable, given the circumstances of our economy, but considering how they’ve put so much time and effort into the project, it would disappointing to see the stores ripped away from us within such a short time.”

Kendall Barnett, a senior, was dismayed but not surprised to hear about the problems: “I would be disappointed to see the Natick Collection go under, but given how unaffordable so many of those stores are, I’m not shocked that the mall is not doing well.”

If the company files for Chapter 11 bankruptcy, the effect on consumers would be minimal; most malls would remain open since most stores are under lease contracts.

Internally, however, the company will be undergoing major changes. To trim its budget, General Growth will be putting up for sale three luxury malls in Las Vegas. Also, they have been given a two-week extension to repay the $900 million accumulated debt and mortgages.

This plan might not prove to be a panacea, considering the company will have between $16.2 to $22 billion total debt by 2012, due to interest accrued. The current financial recession is not making matters easier. Potential buyers are having considerably more trouble raising capital to buy properties.

Nonetheless, William Ackman of Pershing Square Capital hedge fund, who recently purchased 7.5% of General Growth’s stock, is confident that the company will be able to rebound.