On Sept. 21, the trust announced that it is pursuing acomprehensive evaluation of its financial and strategicalternatives, which could include asset sales. The REIT has beenstruggling lately with the capital market dry-up, mostly becausethe company officers, such as Freibaum, used too much debt,according to analysts at FBR Research. "Change was needed, but it'sa tough time to lack financial leadership," according to an FBRstatement. "Friebaum bore responsibility for most of themargin-induced insider selling over the past month, as well as abalance-sheet strategy that relied heavily on the now-shutteredCMBS market. With over $4 billion in debt maturities over the nextyear, and another $13 billion in 2010-2011, it is a periloussituation in which to face a management transition. De-leveragingneeds to happen sooner rather than later."


Trust officials claim that leveraging, and recent selling ofmargin stock, is now under control. "All continuing executiveofficers of the company have informed the company that they haverepaid in full all previously existing margin loans and thus therewill be no further sales of company stock by those executiveofficers to satisfy margin calls. In addition, the Bucksbaum familyinterests have informed the company that they have not sold anyshares of company stock and that they do not intend to sell any oftheir shares of company stock," according to the company statementtoday. The statement also says that Freibaum sold approximately2.95 million shares of common stock on Thursday to satisfy margincalls and applied all of the proceeds to repay outstanding margindebts. "After those sales, Freibaum has informed the company thathe beneficially owns approximately 1.3 million shares of stock andhas approximately $3.4 million of margin debt outstanding,"according to the statement. A trust spokesman did not return callsfor comment.


The REIT continues to be current on all of its debt obligationsand is continuing its full financial and strategic review with itsadvisors, according to the statement. The company's stock wastrading at higher than $25 per share in early September, butstarted the day at almost $11 per share. At press time, the stockwas at $10.55 per share. Christine McElroy, an analyst with Bank ofAmerica Securites, says the moves made today should have happenedsix months ago. The dividend move should save the trust about $134million this year, but it may not be enough, she says. "We'reunsure what impact (the moves today) will have," she said in astatement. "While it could be a sign of a potential change inbalance-sheet strategy, it will also cause near-term disruption,and along with a suspension of the dividend, appears to be a signof deeper liquidity issues." She says if and when the dividend isreinstated next year, she expects a lower payout.


The firm, led by chairman and CEO John Bucksbaum and presidentRobert Michaels, has a portfolio of more than 200 regional shoppingmalls in 44 states. The company also has ownership inmaster-planned community developments and commercial officebuildings.

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