General Growth Announces Litigation Settlement and Operating Partnership Unit Conversion
January 06 2009 - 12:14AM
Business Wire
General Growth Properties, Inc. (NYSE:GGP) announced that the
lawsuit brought by Caruso Affiliated Holdings LLC relating to
Glendale Galleria, a California mall owned by the Company�s
GGP/Homart II joint venture, has been settled for $48 million. The
Company will not be reimbursed for any portion of this payment by
its fifty percent joint venture partner in GGP/Homart II, and it
will also reimburse $5.5 million of costs to such joint venture
partner in connection with the settlement. The lawsuit, which was
being appealed by the Company, was commenced by Caruso in February
2004 and resulted in a judgment of $89.2 million in compensatory
and punitive damages in December 2007. The Company paid the
settlement and costs using a portion of the cash collateral held as
security for the appeal. As a result of the settlement, previously
recorded expenses equal to the judgment amount and certain related
expenses will be reversed to the extent necessary to reflect the
settlement. Such adjustments will result in an increase in Funds
From Operations of approximately $0.16 per fully diluted share and
an increase in earnings per share - diluted of approximately $0.19
for the fourth quarter of 2008. Adam Metz, interim Chief Executive
Officer of General Growth, stated that, �Settlement allows us to
put this matter behind us and focus on the Company�s ongoing
operations and strategic evaluations.� GGP also announced that MB
Capital Units LLC, pursuant to the Rights Agreement dated July 27,
1993, converted 42,350,000 common partnership units held in the
Company�s operating partnership, GGP Limited Partnership, into
42,350,000 shares of GGP common stock. As a result of this
conversion, there are approximately 311.3 million shares of GGP
common stock issued and outstanding. General Growth is a U.S.
based, publicly traded Real Estate Investment Trust. The Company
currently has an ownership interest in or management responsibility
for a portfolio of more than 200 regional shopping malls in 44
states, as well as ownership in master planned community
developments and commercial office buildings. The Company portfolio
totals approximately 200 million square feet of retail space and
includes over 24,000 retail stores nationwide. The Company is
listed on the New York Stock Exchange under the symbol "GGP". For
more information, please visit the Company Web site at www.ggp.com.
This press release contains forward-looking statements. Actual
results may differ materially from the results suggested by these
forward-looking statements, for a number of reasons, including, but
not limited to, our liquidity and refinancing demands, our ability
to successfully manage our strategic and financial review, our
level of indebtedness and interest rates, retail and credit market
conditions, tenant occupancy and tenant bankruptcies, impairments,
land sales in the Master Planned Communities segment, and the cost
and success of development and re-development projects. Readers are
referred to the documents filed by General Growth Properties, Inc.
with the SEC, which further identify the important risk factors
which could cause actual results to differ materially from the
forward-looking statements in this release. The Company disclaims
any obligation to update any forward-looking statements.
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