Pershing Square Capital Management has asked a Delaware court to dismiss a shareholder lawsuit challenging its recent transaction with Howard Hughes Holdings, arguing that the claims against the hedge fund and its founder, Bill Ackman, are without merit, according to a report by Bloomberg.
The proposed class action, filed earlier this year in Delaware Chancery Court, alleges that Pershing Square used its influence to secure greater control of Howard Hughes through a USD900 million purchase of newly issued shares at an unfair price.
According to the complaint, the transaction increased Pershing Square’s ownership stake in the real estate group to nearly 47%, up from roughly 37%, effectively giving the investment firm operational control without paying what plaintiffs described as an appropriate control premium to minority shareholders.
In court filings made public on Monday, lawyers representing Pershing Square and Ackman rejected the allegations, describing the lawsuit as fundamentally flawed and characterising the negotiations as an arm’s-length process conducted over several months.
The filing argued that shareholders were attempting to portray a legitimate commercial negotiation as coercive behaviour, despite what Pershing described as extensive discussions with an independent special committee established by Howard Hughes.
The dispute centres on Ackman’s broader strategy to reshape Howard Hughes into a diversified holding company modelled on Berkshire Hathaway, the conglomerate led for decades by legendary investor Warren Buffett.
Ackman has longstanding ties to Howard Hughes dating back to the restructuring of General Growth Properties, which spun out the company in 2010. He served as chairman of Howard Hughes until stepping down in 2024.
The shareholder complaint alleges that Ackman exerted undue pressure on the company’s board during negotiations, including through a strongly worded letter sent in 2025 after directors resisted an earlier proposal. Plaintiffs claimed the board ultimately relented under pressure relating to their positions and reputations.
Pershing Square’s legal team disputed that account, saying the correspondence merely reflected frustration over the treatment of the firm despite its history as a supportive shareholder. The filing also stated that the special committee secured meaningful governance and economic concessions before approving the transaction.
Representatives for Pershing Square and the shareholder plaintiffs declined to comment publicly on the case.
The matter is being heard as Charter Township of Shelby Fire & Police Retirement System v Pershing Square Capital Management in Delaware Chancery Court.
