Bill Ackman’s hedge fund Pershing Square Capital Management is facing a class action lawsuit from minority investors over its $900m stake increase in Howard Hughes Holdings, which boosted Pershing’s ownership to nearly 47%, according to a report by Bloomberg.
Filed in the Delaware Court of Chancery, the suit alleges that Pershing “coerced and bullied” Howard Hughes’ board into approving terms that gave Ackman operational and managerial control at an “unfair” price, disadvantaging minority shareholders. Under the deal, Howard Hughes agreed to pay Pershing a series of quarterly fees and installed Ackman as executive chairman, aiming to transform the company into a Berkshire Hathaway–style platform for acquiring public and private businesses.
Plaintiffs contend that a special committee of directors initially pushed back on the transaction but ultimately acquiesced following threats to their positions, resulting in a deal that transferred control to Pershing without a control premium for other investors. Pershing and certain company directors are named as defendants.
Ackman, whose involvement with Howard Hughes dates back to its spin-off from General Growth Properties in 2010, has previously served as chairman until stepping down in 2024. Pershing Square has dismissed the lawsuit as “entirely without merit.”
