General Growth settles 401K suit

General Growth Properties Inc., the second-largest U.S. mall owner, reached a $5.75 million settlement resolving a lawsuit against the company over losses in its 401(k) savings plan.

The settlement will be paid out of an insurance policy and will resolve a class-action complaint filed against the company in Illinois, General Growth said in a court filing today in U.S. Bankruptcy Court in Manhattan.

The agreement, which requires court approval, is in the "best interests" of General Growth and its creditors because the Chicago company will get a release of all claims in the lawsuit without having to pay for the settlement, it said.

General Growth filed for bankruptcy last year and is set to seek court approval next month for its restructuring plan. Before the bankruptcy, it was sued by individuals on behalf of participants in its 401(k) plan, according to court papers. Current and former officers, directors and employees were also sued. The cases were later consolidated.

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