Ghermezian Acquires Controlling Interest of US Largest Mall
The Ghermezian family has acquired controlling interest of the Mall of America by closing a Court Ordered transfer of partnership interest from Simon Property Group (SPG) to an entity controlled by the Ghermezian family. The transfer places the nation's largest retail and entertainment complex significantly within the Ghermezian Triple Five Group's extensive real estate portfolio of properties in United States and Canada, which includes Canada's West Edmonton Mall, the world's largest mall.
The closing took place shortly after Simon Property Group's motion to stay the transfer to Triple Five was denied both by the Federal District Court and the Federal Appellate Court.
Following a lengthy trial last year, a Federal Court Judge had ruled that Simons had violated their fiduciary and contractual obligations to Triple Five by wrongfully acquiring 27.5% of the partnership interests in Mall of America from Teachers Insurance and Annuity Association in 1999. The Judge's Order also replaces SPG with Triple Five as Managing General Partner of the Mall.
Standard & Poor's and Moody's confirmed that their rating of the multi- class bonds of Mall of America's financing will remain unchanged and continue at the same level after the transfer of interest from Simon Property Group to
Ghermezian.
In an Order given on February 10, 2004, the Federal Court Judge stated: "The evidence at trial showed unequivocally that Defendants, including SPG, violated the fiduciary duties they owed to Triple Five, and did so repeatedly and with impunity. Indeed, SPG's claims in the weeks after the Court's September 10 Order that the Court exonerated SPG are disingenuous at best and dishonest at worst. The Court did not exonerate SPG, and in fact the evidence at trial clearly established that SPG breached the fiduciary duties it owed to Triple Five."
In his Order on April 29, 2004, the Federal Court Judge declared:
"This Court presided over more than two months of testimony regarding the events surrounding the 1999 transaction. The breaches of fiduciary duty described during those two months were some of the worst the Court has ever seen. Not only did Defendants (Simons) do their best to shut their partner Triple Five out of the transaction, but Defendants lied about the transaction and threatened Triple Five in an attempt to keep Triple Five out of the transaction."
Mr. Nader Ghermezian said, "We are pleased that the Court made this transfer possible. We intend to commit our diverse experience and expertise to improve and expand the Mall."
"Planning is now underway to expand this mega Mall and its other mixed- use components to more than double the size, over 9 million square feet."
The Ghermezian family are considered visionaries and pioneers of the mega- mall concept blending retail, entertainment, and hospitality under one roof.
Mr. Nader Ghermezian, added, "We will work on realizing the original vision for the Mall of America to make it the Eighth Wonder of the World as we had always intended."
Mall of America, located in Bloomington, Minnesota, attracts 42 million visitors each year, about as many visitors as Magic Kingdom, Epcot and Disneyland combined.
Commenting on the Mall's future, Nader Ghermezian added, "We are looking forward to focusing on the next stage of the Mall's development. We intend to ensure Mall of America continues as the premier retail, entertainment and tourist destination in America. Minnesotans can look forward to even more attractive and successful components in addition to high quality retailers."
Mr. Ghermezian added, "We continue to look for development opportunities throughout the United States."
Triple Five is among North America's most diverse real estate development companies with its major strength in mixed-use developments.
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