GGP replaces financial officer

October 04, 2008|By Bloomberg News

Shares of General Growth Properties Inc. rose 27 percent yesterday after the Chicago-based mall owner said it replaced its chief financial officer and suspended dividend payments to weather the seizure in financial markets.

The shares climbed $2.08 to $9.67 in New York Stock Exchange composite trading. The stock had fallen 86 percent in the 12 months through yesterday.

General Growth is the master developer of Columbia and owner of Harborplace and other shopping malls in the Baltimore region. The company said last week that debt problems could force it to sell assets or even the whole company.

General Growth CFO Bernard Freibaum, who has $3.4 million of margin debts outstanding, "is no longer employed by the company" and his position is filled temporarily by Edmund Hoyt, GGP's chief accounting officer, until a permanent replacement is found, the company said in a statement.

Share sales by General Growth executives have compounded investor concerns about the real estate investment trust, which is looking to refinance loans accumulated since its $11.3 billion purchase of Columbia-based Rouse Co. four years ago.

Proxy adviser Glass, Lewis & Co. criticized the company this week for asking the New York Stock Exchange to ban short-selling of its stock even as Freibaum and other executives sold shares.

Freibaum told the company Thursday that he sold 2.95 million shares to meet margin calls on loans, according to the company's statement. He still owns 1.3 million shares, it said.

Freibaum could not be reached for comment.

While the company has met all its debt repayments, it has suspended dividend payments because of the "uncertainty and volatility in the capital markets," General Growth said.

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