Simon Property settles with tycoon's estate

AP News
Posted: Sep 20, 2012 12:43 PM
Simon Property settles with tycoon's estate

NOBLESVILLE, Ind. (AP) — Simon Property Group Inc. has settled a dispute with the estate of shopping mall magnate Melvin Simon that's netted his trust's ultimate beneficiaries nearly $1 billion.

The Indianapolis-based company disclosed Wednesday in a Securities and Exchange Commission filing that the settlement called for converting about 6.5 million in Simon's ownership units for roughly 5.9 million common shares. That led to gross proceeds of about $943.7 million for the Melvin Simon Family Enterprises Trust.

The Indianapolis Business Journal reported ( ) Thursday that the settlement removes the publicly traded company from an ongoing battle legal battle in Hamilton County over Melvin Simon's more than $2 billion estate.

That fight pits Simon's widow, Bren Simon, against his children from an earlier marriage: Deborah Simon, Cynthia Simon-Skjodt and Simon Property Group CEO David Simon.

A jury trial is scheduled for July 2013 in that case.

The conversion of Melvin Simon's ownership units — a large chunk, but not all, of his estate's holdings — allows his family's trust to diversify its assets, preserving the proceeds for all of the trust's ultimate beneficiaries.

As executed, the conversion saves the company more than $100 million. But the estate's take is also more than 50 percent higher than it would have been had Bren Simon succeeded in an attempt to convert the units months after Melvin Simon died in late 2009.

When she tried to convert the units, Simon Property Group intervened in the estate case, arguing that the dispute over the estate proceeds amounted to a lien on the ownership units and prevented conversion.

Hamilton County Superior Court Judge William J. Hughes removed Bren Simon as trustee over her late husband's estate in December 2010, citing among other reasons her attempt to liquidate the ownership stake without advice from a financial professional. He appointed former Indiana Supreme Court Justice Theodore R. Boehm to replace Bren as trustee and as Melvin Simon's personal representative.

The lead plaintiff in the ongoing case is Deborah Simon, who claims her stepmother coerced her father to alter his estate plan in February 2009, seven months before he died at age 82.

Bren Simon has claimed in court filings that the will changes reflected her late husband's desire to compensate her for a drop in the company's stock price and a reduction in the cash dividend. The company eventually restored the dividend and its stock bounded higher.

Melvin Simon in 1960 co-founded what would become Simon Property Group with his brother Herb. The company went public in 1993.

Simon Property Group Inc. currently owns or has an interest in 332 retail real estate properties in North America and Asia.