By Dawn McCarty
NEW YORK - General Growth Properties Inc., the parent company of Providence Place mall planning to exit bankruptcy next month, agreed to pay $230 million to heirs of Howard Hughes to settle a dispute over the Summerlin planned community in Las Vegas.
The heirs will receive $10 million in cash and the remainder in cash or new General Growth common stock soon after it leaves bankruptcy, the Chicago-based company said Monday in a statement. The heirs had disagreed with the company over how to value Summerlin.
General Growth, as part of its bankruptcy reorganization, is separating its traditional retail properties from master-planned community and commercial real estate operations. General Growth plans to give existing shareholders the majority of a new spinoff company now known as Spinco Inc., according to court filings. Summerlin will be part of Spinco, according to a regulatory filing.
“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 Chief Operating Officer Thomas H. Nolan Jr. in the statement.
Hughes, a billionaire aviator, industrialist and filmmaker, died in 1976 at the age of 70. In 1996, Rouse Co. bought his remaining assets, including 22,500 acres of land in Nevada. The Hughes heirs were to receive a portion of profits from future land sales under the deal.
General Growth bought Rouse in 2004 for $11.3 billion and assumed the obligation to Hughes heirs. General Growth filed for bankruptcy protection in April 2009.