Hughes heirs object to General Growth bankruptcy plan

The heirs of Howard Hughes moved to block General Growth Properties Inc.'s plan to exit bankruptcy, saying in an Aug. 11 court filing that the second-largest U.S. mall operator is discriminating against them because they wouldn't receive the same recovery as the company's creditors or shareholders.

General Growth, based in Chicago, is scheduled to go to court next week to ask Judge Allan Gropper in U.S. Bankruptcy Court in Manhattan to allow its creditors to begin voting on the plan. The company seeks to exit bankruptcy by October.

The Hughes heirs were among several parties involved in the bankruptcy case that filed objections to the plan and asked Gropper to order changes. They included the committee representing unsecured creditors, Eurohypo AG and Halcyon Asset Management LLC.

Creditors oppose in part General Growth's proposal for reinstating debt, including $1.35 billion in so-called Rouse bonds, when it exits bankruptcy instead of paying holders in cash.

The case is In re General Growth Properties Inc., 09-11977, U.S. Bankruptcy Court, Southern District of New York (Manhattan).