The bill for General Growth Properties' unsustainable purchase of the Columbia-based Rouse Co. came due this morning as General Growth sought protection from creditors in bankruptcy court. The retail downturn is an accompanying factor. The credit crunch is the proximate cause. General Growth was unable to roll over maturing debt. The Rouse purchase, which is behind more than a third of General Growth's liabilities, set the stage.

Chapter 11 is a way for companies to pare their debts in an organized way while they continue operating their businesses. That's the idea, anyway. In practice operating units fare inconsistently under Chapter 11. But in this case customers of General Growth malls in Columbia, Towson, Owings Mills, Harborplace, White Marsh and elsewhere should be hard pressed to see any difference, whether those malls are part of the filing or not. It's in everybody's interest -- management, shareholders, creditors -- to keep the properties running as well as possible.

Yes, I said shareholders. Usually shareholders are wiped out in bankruptcy court, but General Growth is trading for $1 this morning, which suggests that investors think not all might be lost. (UPDATE: Reader Ryan points out that GGP trading has been halted. $1 is yesterday's price.)  When companies repudiate their debts in bankruptcy, creditors get compensated instead with shares of stock. They get new shares, which generally shove aside all the old shares. In this case I don't think shareholders should hold out much hope. Their best scenario is a quick and surprising turnaround in the economy, consumer spending and commercial real estate generally. That is almost certainly not in the cards.

What's worse, the complexity of General Growth's structure will cause the case to drag on for a long, long time, draining resources, distracting managers etc. For David Cordish or anybody else hoping to quickly grab Harborplace or some other property, that chance just vanished. Get ready for an endless legal journey. As usual the big winners will be the lawyers. (Check out today's Wall Street Journal story on the Lehman Brothers bankruptcy, in which one firm just billed $55 million for three months' work.)