Howard Hughes Lawsuit Targets Investment Tactics

Howard Hughes lawsuit claims Pershing Square used intimidation to secure $900M investment, sparking concerns among minority investors.

February 17, 2026

Nina Dale

Minority investors allege Pershing Square and Bill Ackman intimidated the Howard Hughes board to approve a $900M investment deal.
The lawsuit argues the transaction gave Pershing Square operational control without a sufficient premium for minority shareholders.
The contested investment valued Howard Hughes shares at a 48% premium to market, but still below the firm’s estimated net asset value.
The suit seeks potential cash compensation or the appointment of a new independent board for Howard Hughes.

Key Takeaways

Investor Pressure and Board Dynamics

The lawsuit centers on a $900M deal in May 2025 where Pershing Square, led by Bill Ackman, increased its stake in Howard Hughes. Bisnow reports that minority investors, including a Michigan retirement fund, claim Ackman threatened to oust board members unless they accepted Pershing Square’s offer. The disputed deal allowed Pershing Square to acquire 9M new shares at a 48% premium to the trading price, but critics say this undervalued Howard Hughes relative to its net asset value.

Minority Investors Push Back

The plaintiffs allege the company’s special committee and board yielded to Ackman’s pressure, failing to secure adequate compensation for minority shareholders. Pershing Square’s voting power was capped at 40% following the transaction, but the plaintiffs argue that operational control effectively shifted to Ackman’s firm. The complaint also challenges the involvement of Pershing executive Ben Hakim on the Howard Hughes board, citing conflicts of interest and fiduciary issues.

What’s Next for Howard Hughes

The case, filed in Delaware’s Court of Chancery, calls for class-action status, financial damages, or the installation of a new independent board. The legal challenge follows Ackman’s earlier push to take a majority stake in the developer through a $1.5B transaction that would further consolidate Pershing Square’s control. Howard Hughes, which evolved from General Growth Properties and now boasts a $5B market cap with major master-planned projects, faces scrutiny over its governance. Pershing Square and Ackman have dismissed the lawsuit as meritless, but the outcome could impact board oversight and investor relations for Howard Hughes.