General Growth Properties won bankruptcy court approval for an auction process that makes a group led by Brookfield Asset Management property the first bidder. General Growth fell 11% in New York trading.
US Bankruptcy Judge Allan Gropper in Manhattan approved General Growth’s plan over one proposed by the country’s biggest mall owner, Simon Property Group It gives Brookfield, Fairholme Capital Management and Pershing Square Capital Management warrants to buy stock in the reorganised company in exchange for financing. Testimony at yesterday’s hearing focused on whether the warrants might chill bidding.
“As I understand the process, it is intended to open rather than close, the bidding,” Gropper said during the hearing, adding that General Growth’s equity holders, creditors and board all backed the Brookfield bid.