General Growth sets timeline for reorganization, plans IPO

General Growth Properties Inc., the bankrupt owner of more than 200 U.S. malls from Boston to Los Angeles, aims to confirm a reorganization plan by Oct. 5, after taking 60 days to consider proposals that compete with one from Brookfield Asset Management Inc.

In addition, General Growth said Tuesday that it will launch an initial public offering on the New York Stock Exchange.

General Growth said its shares will start trading on the NYSE on Friday under the ticker symbol "GGP." The company did not disclose how many shares would be offered in the IPO or their price.

The company’s “dual-track” process, considering both mergers and financing bids, is on a clear schedule and won’t take more time to close than a cash-based merger transaction would, General Growth said in papers filed Monday in U.S. Bankruptcy Court in Manhattan. The company gave the timeline in response to creditors, who objected to General Growth’s bid to control its bankruptcy for another six months given a $10 billion offer from Indianapolis-based Simon Property Group Inc.

“The creditors committee’s position is flawed,” lawyers for the company wrote. “Any transaction will require the same time period to accomplish, as outlined by General Growth’s emergence timeline.”

The proposed timeline calls for bidding procedures to be filed by March 19, bids to be received by May 19 and a negotiation period of 35 days. General Growth will share the proposals with unsecured creditors, equity holders, and ad hoc committees, the company said. The deadline for creditors to vote on the plan would be Sept. 20, and Oct. 5 would be the deadline to win court approval of a Chapter 11 exit plan.

Bruce Berkowitz, whose Fairholme Capital Management LLC is the biggest unsecured debt holder of General Growth, said he’s “not interested” in the offers proposed by Simon Property Group Inc. and Brookfield Asset Management Inc., the Wall Street Journal reported, citing an interview.

General Growth said it’s a “poster child” for the benefits of Chapter 11 bankruptcy, as its shares and debt have traded higher, giving it equity value that has increased 22.5 times from approximately $189 million to $4.25 billion, corporate-level unsecured debt that has gone from less than $2 billion to around $7 billion, and an increase in market value from less than $2 billion to more than $11 billion.

The company said it already has restructured 219 entities at the property level, valued at $11.6 billion in secured mortgage debt.

General Growth, based in Chicago, has said it has an offer to reorganize with a $2.63 billion infusion from Toronto-based Brookfield Asset Management. That plan, which values shares at as much as $15 each under a transaction that involves issuing new stock and splitting the company in two, has the support of the largest shareholder, William Ackman’s Pershing Square Management LP.

Simon has filed an objection in bankruptcy court to the company’s rejection of its bid. Simon said it was ignored by General Growth management and received no response to its $10 billion offer Feb. 8, leading it to make the offer public Feb. 16. General Growth’s creditors committee has said it supports that proposed deal.

General Growth said in a statement Monday that its net loss for the year ended Dec. 31 was $1.28 billion on total revenue of $3.14 billion.

“We are encouraged by the trends we saw in the second half of 2009, as occupancy rates and retail sales per square foot stabilized and retail sales trends began to recover,” Chief Executive Officer Adam Metz said in the statement. For the quarter ended Dec. 31, the net loss was $612 million on $794 million in total revenue.