Largest Grocery-Anchored Center Landlord In US Admits To Fudging Earnings Numbers
Manhattan-based Brixmor Property Group, the biggest owner of grocery-anchored malls around the country, announced the resignation of its CEO, president and another exec on Monday.
A review by the company’s audit committee found that financial statements were altered to show consistent NOI across the company’s portfolio of 518 shopping centers and 87M SF, reports the Commercial Observer.
Former CEO Michael Carroll, who also left his post on the board of directors, will be replaced on an interim basis by former DDR CEO Daniel Hurwitz. Michael Pappagallo resigned as president, and Steven Splain left his post as chief accounting officer and treasurer.
Michael Cathers, who had served as SVP of financial accounting, will take over duties as the new chief accounting officer and treasurer.
Blackstone took Brixmor public in 2013 and owns a 37% stake. In a statement sent to Commercial Observer, Blackstone does not mince words. “…we have zero tolerance for unethical behavior at the companies we invest in,” the statement says. “While the dollar amounts involved were small, the principle is not. Fortunately, the business remains solid.”
Share prices of Brixmor indicated otherwise yesterday, dropping 20% to $21.10. The number-fixing was voluntarily reported to the SEC, Michael Berman, the chairman of Brixmor’s audit committee, said on a conference call on Monday. The company is postponing the release of its Q4 ’15 and full-year ’15 earnings to Feb. 29. [CO]