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Ackman Faces Lawsuit Over Howard Hughes Deal
14 Feb
Summary
- Bill Ackman's firm is sued over a deal with Howard Hughes Holdings.
- Investors claim the deal unfairly disadvantaged minority shareholders.
- The lawsuit challenges a $900 million share purchase and management fees.
A proposed class action lawsuit has been unsealed in Delaware Chancery Court, challenging a deal struck by Bill Ackman's Pershing Square with Howard Hughes Holdings Inc. last year. Investors claim Ackman "coerced and bullied" directors into an unfair agreement that disadvantaged minority shareholders, alleging the deal was done at an "unfair" price.
The legal dispute centers on Pershing Square's $900 million purchase of new shares, which boosted its stake in Howard Hughes to nearly 47%. As part of the May agreement, Howard Hughes committed to paying Pershing Square quarterly fees and making Ackman executive chairman.
Ackman's stated ambition was to transform Howard Hughes into a business akin to Berkshire Hathaway, utilizing low-cost capital for investments. The lawsuit references an "unhinged" letter sent by Ackman in 2025 when a special committee initially resisted a proposal, with investors alleging the board capitulated to Ackman's threats.
The lawsuit names Ackman and company directors as defendants. The legal battle unfolds in Delaware, a state whose business laws have faced scrutiny from executives like Elon Musk. Changes were made to Delaware law last year to make it harder for minority shareholders to challenge executive decisions.
