General Growth Properties Inc. is putting in place a nine-member board for a spinoff company _ The Howard Hughes Corp. _ that will consist of General Growth's portfolio of planned communities and other real estate assets.
The nation's second-largest shopping mall operator said Friday that it plans to name Pershing Square Capital Management CEO William Ackman as chairman. The board will take over when General Growth exits Chapter 11 bankruptcy protection, which is likely to occur early next month.
Pershing's investment deal with Howard Hughes Corp. gives it the right to name three board members. Aside from Ackman, Pershing designated Allen Model and Gary Krow to the board. Model is co-founder, treasurer and managing director of consulting firm Overseas Strategic Consulting Ltd. Krow is president, CEO and a board member for GiftCertificates.com.
Canadian property manager Brookfield Asset Management also has a deal in place to name one board member. It selected David Arthur, Brookfield's managing partner for real estate investments - North America.
Pershing, Brookfield and The Fairholme Fund comprise a group that agreed to provide the capital to finance General Growth's exit from bankruptcy. Chicago-based General Growth sought shelter from creditors last April. It was the largest real estate bankruptcy in U.S. history.
Last month, General Growth, which owns The Howard Hughes Corp. as well as Howard Hughes Properties Inc., said it would pay $230 million to some of the heirs of moviemaker and aviation mogul Howard Hughes to settle a dispute over a Las Vegas development. The community in question, Summerlin, is being developed by The Howard Hughes Corp.
When General Growth leaves bankruptcy protection, shareholders will own stock in two separate companies _ General Growth and the newly formed company, initially called Spinco, which will manage a diverse group of properties with little debt that have development potential.
General Growth currently owns and manages interest in more than 200 regional shopping malls in 43 states. It also owns commercial office buildings and planned communities.
Other board members include Adam Flatto, president of privately held real estate investment and development company The Georgetown Co.; Jeff Furber, CEO of real estate investment management AEW Capital Management LP and Scot Sellers, CEO of apartment company Archstone.
Shares of General Growth gained 23 cents to $16.01 in morning trading.