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Real estate trust juggles leadership

October 28, 2008|The Associated Press

CHICAGO — Real estate investment trust General Growth Properties Inc. said Monday that it replaced its chief executive and president with two directors, effective immediately, after learning about loans that were made that did not follow company policy.

The company also said it would seek buyers for its Las Vegas retail property portfolio, which includes Fashion Show Mall, Grand Canal Shoppes and the Palazzo.

General Growth said it the board recently discovered that an affiliate of a Bucksbaum family trust made unsecured loans to President Robert A. Michaels and Bernard Freibaum, the company's former director and chief financial officer. The $10-million loan to Michaels has been repaid. The loan to Freibaum, who was fired before the board learned of the loans, totaled $90 million, with $80 million still outstanding, General Growth said.

The company said Director Adam Metz would take over for John Bucksbaum as interim chief executive and director Thomas H. Nolan Jr. would serve as interim president.

Bucksbaum will continue to serve as chairman, and Michaels will remain chief operating officer.

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