PROVIDENCE, R.I. (WPRI) — Providence Place has been ordered into receivership, a state-level version of bankruptcy, after its largest private lenders alleged the company that manages the mall owes $259 million, casting a question mark over the future of the state's largest shopping center. Target 12 has learned that R.I. Superior Court Judge Brian Stern has granted a petition for receivership filed by U.S. Bank National Association, which represents multiple lending entities for the mall. Joseph DiOrio, a well-known bankruptcy and creditors attorney representing the lenders, outlined the request in documents filed in court earlier this week. He alleged the mall's management company, Brookfield Properties, borrowed $305 million from the lenders in 2011 through the corporation GGG-Providence Place LLC. A loan extension was agreed to in 2021, but lending documents submitted in court show the management company fell into default when the loan matured in May. As of Oct. 28, DiOrio alleged GGG-Providence owed $259 million, excluding fees and other costs. He asked the judge to place the Chicago-based mall operator into receivership, have another mall-management firm step in, and to work with a court-appointed receiver to "develop an operating budget." ALSO READ: RI mortgage broker accused of fraud enters guilty plea Stern granted the receivership petition Thursday, but no immediate changes were made to management and a receiver hasn't yet been appointed. Receivers are typically attorneys who take over the finances of struggling entities and try to either shore of their finances, execute a sale and pay off creditors or help the entities sell off their assets. The court order -- among other provisions -- grants the lenders the authority to engage a real estate broker, "to market for sale the mall and to otherwise advertise for sale and solicit offers to purchase the mall," according to court documents. A spokesperson for Brookfield did not immediately respond to a request for comment Thursday evening. Receivership marks an elevated level of distress for the 1.4 million-square-foot mall, which was hailed as a crown jewel when it opened in 1999 but has been struggling financially amid changing consumer habits. Shoppers have increasingly moved away from brick-and-mortar retailers and more toward online sellers, which has challenged malls across the country. In June, the Kroll Bond Rating Agency told creditors Providence Place may be losing its anchor tenant, Macy's. Executives at Macy's told investors earlier this year they were planning to close 150 "underperforming" locations, including 50 of them by 2026. Could Providence Place survive without Macy’s? Providence Place currently pays the city about $500,000 per year under a tax-treaty that ends in 2028. In 2022, Brookfield Property proposed a 20-year extension, an idea that so far hasn't received much support from Mayor Brett Smiley's administration or the City Council. “Like many other malls nationwide, the mayor believes that Providence Place needs to adapt to changing market conditions,” Smiley spokesperson Josh Estrella said after the judge order. “Many successful malls have evolved by incorporating mixed-use development and new commercial spaces to better fit the evolving needs of our community.” Eli Sherman ([email protected]) is a Target 12 investigative reporter for 12 News. Connect with him on Twitter and on Facebook. Close Thanks for signing up! Watch for us in your inbox. Subscribe Now Breaking News SIGN UP NOW