General Growth Properties Inc. said Tuesday it reached a $48 million settlement with Caruso Affiliated Holdings LLC over unfair business practices related to competition for tenants at competing mall sites in Glendale.
The settlement is considerably less than the $89.2 million in compensatory and punitive damages a jury awarded Los Angeles-based Caruso Affiliated more than a year ago. The award was appealed by Chicago-based General Growth, which half-owns the Galleria through a joint venture called GGP/Homart II.
Caruso Affiliated opened the competing Americana at Brand shopping center across the street from General Growth's Glendale Galleria last year.
In the original 2004 lawsuit, Caruso Affiliated alleged that General Growth, which owns and manages more than 200 malls, intimidated Cheesecake Factory Inc. as it was considering opening a restaurant in Americana, and employed other unfair business practices against Caruso. Cheesecake Factory is a tenant at Americana.
"I am very pleased with this settlement and having this matter resolved in our favor,"said Caruso Affiliated Chief Executive Rick Caruso in a statement. "The jury verdict sent a clear message that proper business ethics will always prevail."
As part of the settlement, General Growth said it will also reimburse $5.5 million in expenses to its joint venture partner in GGP/Homart II.
General Growth, a real-estate investment trust that reportedly is considering a bankruptcy filing to reorganize its debt, is using cash collateral held as security for the appeal to pay the settlement.
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