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1、M BA 论坛 - M BA BBS . CO M9-305-068REV: JUNE 9, 2005 _ Professor Lynn Sharp Paine and Research Associate Christopher M. Bruner, J.D., prepared this case from published sources. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources o
2、f primary data, or illustrations of effective or ineffective management. Copyright 2004 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http:/www.hbsp.har
3、vard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any meanselectronic, mechanical, photocopying, recording, or otherwisewithout the permission of Harvard Business School. LYNN SHARP PAINE CHRISTOPHER M. BRUN
4、ER Mall of America (A) Triple Five of Minnesota, Inc., brought suit in the U.S. District Court for the District of Minnesota against Melvin and Herbert Simon, certain other individuals, and various entities controlled by the Simons (collectively referred to as the Simons). Triple Five and its owners
5、, four members of the Canada-based Ghermezian family, alleged numerous breaches of fiduciary duty by the Simons, the Ghermezians partners in developing the internationally known Mall of America, a 4.2-million- square-foot retail and entertainment complex located in a Minneapolis suburb. The case cen
6、tered on the Simons purchase in 1999 of a third partys interest in the Mall. The case, heard by Judge Paul Magnuson, involved issues arising under Minnesota partnership law.1 Background The idea for the Mall of America was conceived by four brothersRaphael, Nader, Bahman, and Eskander Ghermezian. Th
7、e Ghermezians were the developers and owners of the West Edmonton Mall (Edmonton, Alberta), the “biggest indoor retail and entertainment complex in the world,” which opened in 1981.2 In 1986 their company, Triple Five, secured development rights for the land on which the Mall of America would be bui
8、lt, though they had trouble securing financing. In 1987 the Ghermezians became involved with Melvin and Herbert Simon, at which point Teachers Insurance and Annuity Association (“Teachers”) agreed to finance construction of the Mall. Teachers later converted its interest into an equity investment in
9、 the form of a 55% stake in the partnership that owned and controlled the Mall, the Mall of America Company LP (“MOAC LP”). The other partner in MOAC LP was an entity called Mall of America Associates (“MOAA”), itself “a 50/50 partnership” between Triple Five and another entity controlled by the Sim
10、ons.3 (See Exhibit 1 for a chart showing the Malls initial ownership structure.) 1 Unless otherwise indicated, the facts presented in this case are drawn from Triple Five of Minnesota v. Simon et al., 280 F. Supp. 2d 895, 2003 U.S. Dist. LEXIS 15861 (2003), decided September 10, 2003. For a fact she
11、et on the Mall of America, see http:/ 2 See Triple Five of Minnesota v. Simon et al., 280 F. Supp. 2d at 897; “History and Development,” available at http:/ 3 The “entertainment portion of the Mall” was held by an entity called Minntertainment Associates, in which the same parties “owned similar per
12、centage interests.” Triple Five of Minnesota v. Simon et al., 280 F. Supp. 2d at 898. For the sake of clarity, the following discussion focuses on the Mall itself. M BA 论坛 - M BA BBS . CO M305-068 Mall of America (A) 2 Among other things, MOAAs partnership agreement “provided that no partner shall b
13、e liable to any other partner except in the case of fraud or gross negligence.” Although Teachers owned only 55% of the Mall, it received virtually all of the Malls profits. Under various agreements of the parties, a $683 million capital account was established (representing Teachers total investmen
14、t), and Teachers received a guaranteed 8 % annual return on this account (approximately $58 million, an amount exceeding annual profits since the Malls inception). Any income beyond this amount would be split among the parties, with Teachers again having a preference on its additional portion of the
15、 profits. Moreover, if the Mall were ever sold or refinanced, the proceeds would first go to pay back Teachers contribution to the venture, and “after 2002, Teachers could force MOAA either to buy the Mall at a price set by Teachers or to allow Teachers to sell the Mall at a price set by Teachers.” MOAA received only a management fee of 5% of gross income per year. The Simon-controlled partner, which actually managed the Mall, received 80% of this fee, and Triple Five received the remaining 20%. The Teachers Transaction By March 1998,
