General Growth Properties, the second-largest U.S. mall owner, replaced its CEO and president and put three luxury Las Vegas malls on the market in efforts to keep its debt load from leading the company into bankruptcy, according to The Wall Street Journal.
John Bucksbaum was replaced by the company’s board. His removal is yet another blow to General Growth’s founding Bucksbaum family, which has seen its approximate 25 percent stake in the company plummet from more than $4 billion in March 2007 to approximately $150 million today. The company’s stock has decreased by a staggering 97 percent.
Bucksbaum and board members had discussed his departure, however when the board found out that the Bucksbaum family had made loans to two senior General Growth executives, the changes were quickly implemented. The family loaned CFO Bernie Freibaum $90 million and president and COO Bob Michaels $10 million to help them pay margin loans they used to buy General Growth stock. The board had no knowledge of the loans, according to WSJ.
Freibaum was replaced on October 3 and still owes the Bucksbaums $80 million. Michaels has paid off his loan.
Adam Metz, an independent director, has replaced Bucksbaum. Thomas Nolan will succeed Michaels as president. Michaels will remain COO but has forfeited his board seat.
“Tom and I are both very familiar with the company, the asset class and the financial strategy of the company,” Metz told WSJ.