UPDATE 1-General Growth cuts forecast for year
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NEW YORK Dec 10 (Reuters) - General Growth Properties (GGP.N: Cotización), the second-largest U.S. mall operator, on Monday lowered its forecast for 2007, citing an additional $52 million in damages it will record as a result of a lawsuit by a California shopping center developer.
General Growth said it sees full-year 2007 core funds from operations, or core FFO, in the range of $2.95 to $2.98 per share, a decrease of 18 cents per share from its prior forecast.
General Growth said it expects to record a fourth-quarter charge of $37 million for its partner's share of compensatory damages, and $15 million for punitive damages.
As previously announced, the jury awarded California shopping center developer Caruso Affiliated Holdings LLC, $74.2 million in compensatory damages and $15 million in punitive damages in the case.
"We emphatically disagree with the verdict and the award of punitive damages," John Bucksbaum, chief executive, said in a statement. "We will ask the court to overturn the jury's decision. However, we believe the prudent action at this time is to reflect the full amount of the verdict in our guidance and financial statements."
Both decisions were the result of a lawsuit against the Chicago-based company that involved the Glendale Galleria, a California mall.
In the lawsuit, which dates back four years, Caruso accused General Growth of engaging in anti-competitive practices and hindering the development of the 900,000 square foot open-air shopping center Caruso was building across the street from the Glendale Galleria, a mall General Growth acquired in 2003 in a joint venture with the New York Common Retirement Fund.
General Growth recorded its half of the $74.2 million verdict, or about $37 million, in the third quarter. Continuación...