Hughes heirs file objections to General Growth reorganization
Heirs to the estate of former Las Vegas casino magnate and landowner Howard Hughes have filed objections in a bankruptcy case involving a major national retail developer.
The heirs oppose the Chapter 11 reorganization plan and disclosure statement for General Growth Properties, the developer that acquired local Hughes assets, including the Summerlin master plan, when it bought out The Rouse Co. in 2004.
The beneficiaries say General Growth's proposal doesn't specify how the group will be treated, or what obligations General Growth has to the Hughes heirs.
The complainants add that General Growth has "repeatedly threatened" them with the prospect of unsecured, noninvestment-grade notes if they don't settle their claims to General Growth's satisfaction.
The plan could also allow General Growth to treat Hughes heirs as unimpaired, which would mean the beneficiaries couldn't vote for or against the reorganization proposal, they said.
The beneficiaries also said in their filing that they're entitled to roughly half of the value of Summerlin's unsold portions, among other assets, and they're asking for equal shares of stock in a reorganized General Growth and in Spinco, a spinoff company that would house the developer's master-planned communities. About 7,000 acres of the 22,500-acre Summerlin remain undeveloped.
"The debtors are admittedly solvent and fully capable of satisfying the claims of the Hughes heirs in the same manner as other unsecured creditors or equityholders," the filing said. "There is no legitimate reason to provide the Hughes heirs with any other treatment, which is blatantly discriminatory and precludes confirmation of the Plan."
An October Wall Street Journal article pegged the number of Hughes heirs and beneficiaries at more than 1,000, including more than 200 relatives.
