MPG will be burning cash on operations for the near future. If there are no additional property sales in which the company has equity, the cash burn becomes the most important consideration. Mortgages on three properties come up for renewal in 2013. The current mortgage on KPMG is approximately equal to its market value, in which case the mortgage holder may elect to ask for another paydown on the balance to extend the mortgage, or try to take the property back. The paydown is likely to drain cash by at least $30 million. There is much more equity in the other two properties, but if they are repossessed, some portion will go toward cap gains taxes. Taking cash out of one or both properties would be great for MPG.
In the consolidated view, the total market value of MPG properties exceeds its total mortgage obligations, so there are a couple possible game plans for the future. MPG could try to hold the entire package together and wait for an improvement in market prices to save them. That seems to be their preferred course of action, but it will take over five years to make measurable progress. The company could abandon properties under water or nearly so, drastically reducing its size. Whichever course the company takes, and it will probably be determined by its creditors, and only the preferred stockholders are likely to benefit.