Monday, October 27, 2008

General Growth Shuffles Management

GG said its chief executive and president have stepped aside, and will be replaced by two directors. The giant retail developer also said the president being replaced and a former chief financial officer failed to follow company policy in disclosing certain loans they received to help with stock margin calls.

The company said it is now putting several Las Vegas shopping centers up for sale; its hired Goldman, Sachs & Co. and Eastdil Secured to market the properties. No new info on Columbia.

Some excerpts from its statement:

General Growth Properties, Inc. (NYSE: GGP) today announced that two independent directors of the company will assume senior management positions effective immediately. Adam Metz will serve as interim Chief Executive Officer, and Thomas H. Nolan Jr. will serve as interim President, positions previously held by John Bucksbaum and Robert A. Michaels, respectively. Mr. Bucksbaum will continue to serve as Chairman and Mr. Michaels will continue to serve as Chief Operating Officer and a senior officer of the company. In order to maintain a majority of independent directors, Mr. Michaels has also given up his Board seat.

...The company’s Board of Directors and management team, along with its financial and legal advisors, continue to be fully engaged in a comprehensive evaluation of all financial and strategic alternatives for the company, including but not limited to, asset sales, joint ventures, corporate level capital infusions, and broader strategic business combinations.

...The Company also announced that it has recently come to the attention of the Board that an affiliate of a Bucksbaum family trust advanced unsecured loans to Mr. Michaels and Bernard Freibaum, the company’s former director and CFO, for the purpose of repaying personal margin debt relating to company stock. The loan to Mr. Michaels, which totaled $10 million, has been repaid in full. The loan to Mr. Freibaum, whose employment was terminated prior to the Board’s knowledge of these loans, totaled $90 million and has $80 million presently outstanding.

A review by the Company’s independent directors concluded that, while the failure to disclose the loans to the Company’s Board of Directors did not follow internal company policy, no company assets or resources were involved in the loans and that no laws or Securities and Exchange Commission rules were violated as a result of the loans.

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