GGP Strikes $230M Deal Over Disputed Las Vegas Assets
- Sep 20, 2010
General Growth Properties Inc. has taken another major step on the long road to recovery, settling a dispute with Howard Hughes’ heirs over Summerlin, a planned community in Las Vegas. In a deal worth $230 million, GGP will pay $10 million in cash and $220 million in either cash or new common stock, once the company emerges from bankruptcy.
The agreement disclosed on Monday closes the legal battle over the 22,500-acre master planned community about 12 miles from Downtown Las Vegas. General Growth had acquired Summerlin as part of Rouse Cos. in 2004. Rouse, in turn, had bought Summerlin in 1996 from Hughes’ heirs, who agreed to receive phased payments as the property was built out, according to the Las Vegas Sun. General Growth and the heirs disagreed over the value of Summerlin’s approximately 8,900 remaining undeveloped acres. In July the heirs received permission in federal bankruptcy court to proceed with an appraisal.
“With this agreement, GGP settles one of the last remaining material issues impacting the capital structure of the new GGP and ‘Spinco’ as we continue our steady march toward emergence from bankruptcy,” said Thomas Nolan, the company’s president & chief operating officer, in a statement Monday. Spinco Inc.. is the spinoff entity that will include General Growth’s non-core assets, like master-planned communities.
Nolan and GGP’s CEO, Adam Metz, will stay in their positions for up to a year after the expected completion of the company’s restructuring plan next month, GGP disclosed on Sept. 7.