S&C Obtains Dismissal of Shareholder Lawsuit Related to $9.25 Billion GGP Acquisition

June 25, 2021

The Delaware Court of Chancery dismissed a stockholder suit challenging Brookfield Property Partners LP's $9.25 billion acquisition of GGP Inc., which closed in 2018. S&C represented the former CEO of GGP, who was named as a defendant.
The plaintiffs alleged that Brookfield wielded its influence as a controlling stockholder of GGP to force it into a transaction that was dilutive to common stockholders. Vice Chancellor Joseph Slights held that Brookfield did not control GGP or the transaction and that plaintiffs failed to plead facts that would sufficiently rebut the presumption of independence that applied to the special committee empaneled to consider the transaction. The court further rejected the plaintiffs' claim that the merger structure deprived stockholders of the full scope of their appraisal rights under Delaware law.
The court also rejected the plaintiffs' position that GGP's CEO, Sandeep Mathrani, breached his duties by failing to push for an asset sale of GGP properties, which he had advocated in the past, instead of an entity-level acquisition. The plaintiffs alleged that Mathrani did so to benefit Brookfield, which hired him as a top executive after the transaction. The court held that under Delaware Law, Mathrani was entitled to rely in good faith on the special committee's recommendation to move forward with the acquisition.
The S&C team representing Sandeep Mathrani included Brian Frawley and Y. Carson Zhou. S&C received a Litigator of the Week "shout-out" from AmLaw's Litigation Daily as part of the team defending the companies and individuals named in this lawsuit.