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CHICAGO-The San Diego-based law firm Coughlin Stoia Geller Rudman & Robbins LLP has filed a class action lawsuit against General Growth Properties Inc. in the US District Court for the Northern District of Illinois. Defendants also include current and former GGP officers John Bucksbaum, Bernard Freibaum, Joel Bayer, Edmund Hoyt, Jean Schlemmer and Robert A. Michaels. The suit, which references recent management moves and announcements by the company, claims to represent stockholders in the company for the period of April 30, 2008 to Oct. 26, 2008. The filer is E. B. Gorham, a stockholder, though the law firm has stipulated that anyone else wishing to serve as lead plaintiff can notify the court within the next 60 days.

In late October, GGP said it was replacing its CEO and president with two new hires, Adam Metz and Thomas Nolan Jr., respectively, who will serve in interim positions. Former CEO John Bucksbaum will continue to serve as chairman and former president Robert Michaels moved to COO. In that announcement, the company admitted that an “affiliate of a Bucksbaum family trust” advanced unsecured loans to Michaels and former director and CFO Bernard Freibaum, who is no longer with the company. The $10 million loan to Michaels is paid, the company says, but Freibaum still owes $80 million of the $90 million he received, said company officials in a statement.

In the filing, GGP is accused of fraud, insider trading, and false and misleading statements. “During the class period, defendants made false and misleading statements about General Growth’s access to financing. Specifically, defendants represented that General Growth would be able to refinance billions of dollars in debt that was coming due in the fall of 2008 and spring of 2009. In fact, General Growth was finding it very difficult to line up financing on acceptable terms. Further, defendants failed to disclose that defendants Michaels and Freibaum had received loans from defendant Bucksbaum’s family trust in violation of the company’s Code of Business Conduct and Ethics,” according to the filing.

Officials with GGP, at the time of the management change announcement, said they believed no laws or SEC rules were broken by the loans. However, the loans did violate company policy, the statement said. Neither a GGP spokesman nor a spokesman for the law firm returned calls for comment. The mall REIT will hold its next conference call at 9 a.m. Wednesday.

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