General Growth Properties GGWPQ
GGP filed for liquidity, not insolvency; with assets materially exceeding liabilities, a seven-year debt extension would deliver 10x–25x upside on equity trading at $1.19.
Thesis
Pershing Square argues General Growth Properties — the second-largest U.S. mall REIT with 200+ regional malls including trophy assets like Ala Moana and Fashion Show — filed Chapter 11 because of a capital-markets liquidity shock, not because it was insolvent. Like U-Haul parent Amerco and Alexander's before it, GGP generates positive cash flow, owns high-quality assets worth materially more than its ~$28bn of liabilities, and has an insider-aligned shareholder advocate (Pershing itself). A consensual seven-year extension of secured and unsecured debt at current rates would let operating cash flow deleverage the balance sheet and repay creditors in full while preserving equity. Summing GGP REIT ($9–$22/sh), GGMI ($1–$2/sh), MPC ($0.27–$6.72/sh) plus hidden asset value (Las Vegas land, Victoria Ward, non-recourse mortgages) yields $10.40–$30.08 per share versus a $1.19 stock price — implying 774%–2428% upside.
SCQA
GGP is the second-largest U.S. mall REIT with 200+ regional malls, a diverse 24,000-tenant base, 82% fixed-rate debt, and long-dated leases producing highly stable NOI through the cycle.
A 2008–09 capital-markets freeze made GGP unable to refinance maturing debt and forced a Chapter 11 filing despite positive operating cash flow and assets worth materially more than liabilities.
Extend GGP's secured and unsecured debt seven years at current rates, repay creditors in full from operating cash flow, and preserve equity value for existing shareholders.
Sum-of-parts fair value is $10.40 to $30.08 per share versus $1.19 today, implying 774% to 2428% upside if the restructuring preserves equity.
The three reasons
- 1
GGP's assets materially exceed liabilities — this is a liquidity bankruptcy, not insolvency
- 2
Simon's 8.4% cap rate implies GGP REIT alone is worth $9–$22/share vs. $1.19 market price
- 3
Solvent-debtor precedent (Amerco +456%, Alexander's +358%) shows equity can appreciate dramatically in Chapter 11
Primary demands
- Extend all secured and unsecured debt maturities by seven years at existing interest rates to enable deleveraging via operating cash flow
- Preserve equity value through a 'fair and equitable' reorganization plan consistent with Bankruptcy Code §1129
- Avoid fire-sale liquidation that would destroy the GGP franchise and depress broader REIT real estate values
- Suspend cash dividend through year-end 2009, then 10% cash / 90% stock to accelerate balance-sheet repair
KPIs cited
Pattern membership
Precedents cited
- Amerco / U-Haul bankruptcy (2003–04, stock +456%)
- Alexander's Inc. bankruptcy (1992–95, stock +358%)
- Comdisco bankruptcy (shareholders received warrants in ~30% of post-reorg equity)
- Till v. SCS Credit Corp. (Supreme Court cram-down precedent)
- Bankruptcy Reform Act of 1978 / Bankruptcy Code §1129
Composition what's on the 68 slides
Slide gallery ·
Notes
Seminal Ackman long-equity-in-bankruptcy thesis presented at the 2009 Ira Sohn Conference, about a month after GGP's April 2009 Chapter 11 filing. Title 'The Buck's Rebound Begins Here' is wordplay on the Bucksbaum family (GGP founders) and the ~$1 stock price. Ackman is widely understood to be the author but is not named on the cover or signature page — only the firm is credited, so author_name is null. Unusual posture for activism: Pershing is not attacking management; it approvingly quotes Chairman John Bucksbaum and former CFO Bernie Freibaum to support the asset-quality case, and proposes a consensual restructuring that preserves value for all constituencies. Heavy 'Bankruptcy 101' educational content (§1129 cram-down, Till v. SCS Credit Corp) because the core argument hinges on a legal-structural claim most equity investors would miss. Stake not disclosed in deck — only that Pershing owns GGP equity, total return swaps, and unsecured debt. Visual style is standard Pershing Square house (blue header bars, yellow callout boxes, functional charts); several deliberately sparse full-page 'idea' slides (pp. 33, 38, 39, 52) are used as transitions.