General Growth shakes up management team
Pacific Business News (Honolulu)
General Growth Properties, owner of 200 malls nationwide, is replacing its CEO and president.
The Chicago-based real estate investment trust said it is replacing CEO John Bucksbaum and President Robert Michaels with company directors Adam Metz and Thomas Nolan, respectively, according to a Securities and Exchange Commission filing. However, Bucksbaum will remain as chairman and Michaels will continue as chief operating officer.
The company also said it will sell its Las Vegas property portfolio of three malls. The company has been looking to shed properties to reduce debt as its stock price has fallen from a high of $54 on Oct. 31, 2007, to about $2.30 Monday. In a September SEC filing, it said it is developing “a comprehensive, strategic plan to generate capital,” which could include “a corporate level capital infusion” or the sale of its equity and joint venture stakes in other development projects.
General Growth (NYSE: GGP) had recently learned that an affiliate of a Bucksbaum family trust made unsecured loans to Michaels and Bernard Freibaum, former director and chief financial officer. The loan was made “for the purpose of repaying personal margin debt relating to company stock,” according to a company press release. Michaels’ loan, of $10 million, was repaid, while Freibaum still owes $80 million on his $90 million loan. Freibaum was terminated before General Growth became aware of the loan, it said.
General Growth said no company assets were involved in the loans, but they did break with corporate policy.
General Growth operates more than 200 malls and, like many large real estate investment companies, is hamstrung by the limited credit market, declining consumer spending and rising operating costs. In its second-quarter report filed with the Securities and Exchange Commission, General Growth said that as of June 30, roughly $2.4 billion and $3.1 billion in debt will mature in 2008 and 2009, respectively.
In Hawaii, General Growth manages Ala Moana Center, Ward Centers and Windward Mall on Oahu. The company also manages the Kings’ Shops at Waikoloa Beach Resort, Prince Kuhio Plaza and Queens’ Marketplace on the Big Island; and Whaler’s Village and Queen Kaahumanu Center on Maui. General Growth also will manage the planned Kapolei Commons.
The company will post its third-quarter earnings Nov. 5.
Scott Dance of the Baltimore Business Journal, an affiliated publication, compiled this report.
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