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CHICAGO-Analysts agree that this morning’s removal of Bernard Freibaum as CFO of General Growth Properties Inc., based here, was the right thing to do, but they wonder if the move was in time to halt the company’s slide. The company has appointed SVP and chief accounting officer Edmund Hoyt as the interim CFO, and has also suspended the REIT’s common stock dividend, “given the uncertainty and volatility in the capital markets, and the fact that all distributions currently required to maintain REIT status have already been made this year,” according to a company statement.

On Sept. 21, the trust announced that it is pursuing a comprehensive evaluation of its financial and strategic alternatives, which could include asset sales. The REIT has been struggling lately with the capital market dry-up, mostly because the company officers, such as Freibaum, used too much debt, according to analysts at FBR Research. “Change was needed, but it’s a tough time to lack financial leadership,” according to an FBR statement. “Friebaum bore responsibility for most of the margin-induced insider selling over the past month, as well as a balance-sheet strategy that relied heavily on the now-shuttered CMBS market. With over $4 billion in debt maturities over the next year, and another $13 billion in 2010-2011, it is a perilous situation in which to face a management transition. De-leveraging needs to happen sooner rather than later.”

Trust officials claim that leveraging, and recent selling of margin stock, is now under control. “All continuing executive officers of the company have informed the company that they have repaid in full all previously existing margin loans and thus there will be no further sales of company stock by those executive officers to satisfy margin calls. In addition, the Bucksbaum family interests have informed the company that they have not sold any shares of company stock and that they do not intend to sell any of their shares of company stock,” according to the company statement today. The statement also says that Freibaum sold approximately 2.95 million shares of common stock on Thursday to satisfy margin calls and applied all of the proceeds to repay outstanding margin debts. “After those sales, Freibaum has informed the company that he beneficially owns approximately 1.3 million shares of stock and has approximately $3.4 million of margin debt outstanding,” according to the statement. A trust spokesman did not return calls for comment.

The REIT continues to be current on all of its debt obligations and is continuing its full financial and strategic review with its advisors, according to the statement. The company’s stock was trading at higher than $25 per share in early September, but started the day at almost $11 per share. At press time, the stock was at $10.55 per share. Christine McElroy, an analyst with Bank of America Securites, says the moves made today should have happened six months ago. The dividend move should save the trust about $134 million this year, but it may not be enough, she says. “We’re unsure what impact (the moves today) will have,” she said in a statement. “While it could be a sign of a potential change in balance-sheet strategy, it will also cause near-term disruption, and along with a suspension of the dividend, appears to be a sign of deeper liquidity issues.” She says if and when the dividend is reinstated next year, she expects a lower payout.

The firm, led by chairman and CEO John Bucksbaum and president Robert Michaels, has a portfolio of more than 200 regional shopping malls in 44 states. The company also has ownership in master-planned community developments and commercial office buildings.

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