This is a sidebar to “The Paper World of Brookfield Asset Management.” For more coverage, click here. Brookfield Asset Management’s disclosure practices have raised regulatory eyebrows before. In a nine-page June 10, 2009, letter, the Securities and Exchange Commission raised with Brookfield a laundry list of concerns it had about Brookfield Asset Management’s homebuilding subsidiary Brookfield Homes, requesting more detailed disclosure. One issue was the Brookfield’s failure to disclose that Craig Laurie, Brookfield Homes’ chief financial officer, had also been serving as the CFO of Crystal River Capital, a company that was then being managed by another Brookfield Asset Management unit. Continue Reading →
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Northern Exposure
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This is a sidebar to “The Paper World of Brookfield Asset Management.” For more coverage, click here. Beginning at about 9 a.m. on Jan. 24, 1996, in the offices of Toronto law firm of Tory Tory DesLauriers & Binnington, a combative former Ontario Securities Commission regulator named Joseph Groia made a small piece of Canadian legal history by deposing a native South African named Jack Lorne Cockwell. Though not a shy man, the 55-year-old Cockwell had thus far achieved astounding career success, due in some measure, to avoiding people like Joe Groia. Continue Reading →
Filed under: Sidebars, Brookfield Asset Management, David Kerr, Edward Bronfman, Great Lakes Holdings, Hees International Bancorp, Ian Cockwell, Jack Lorne Cockwell
A Rousing Relationship
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This is a sidebar to “The Paper World of Brookfield Asset Management.” For more coverage, click here. A series of transactions beginning last winter involving Brookfield Asset Management and Rouse Properties (a New York-based mall developer in which Brookfield has a substantial investment) illustrates how complex financial moves with related parties can prove remarkably advantageous. The backstory: Rouse Properties, a developer of Class B malls (a real estate industry term referring to malls that are non-dominant competitors in their region, with sales of less than $400 a square foot), was spun out of General Growth Properties in August 2011. In February 2012, Rouse conducted an unusual $200 million stock purchase rights offering, whereby existing shareholders were given the opportunity to “subscribe,” or buy, shares at $15 for one month when the shares were trading around $13.75. Continue Reading →
Filed under: Sidebars, Brookfield Asset Management, Brookfield U.S. Holdings, Class B malls, General Growth Properties, Rouse Properties
The Paper World of Brookfield Asset Management
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Enter the name of Toronto-based public company Brookfield Asset Management into a search engine and it delivers more than 1 million results. The global conglomerate, whose annual sales exceed $18 billion, controls ports in England, owns Manhattan’s prestigious World Financial Center and sells Chicago a fair measure of its electricity. Yet the massive enterprise is better known for what it owns than how it operates. The Southern Investigative Reporting Foundation began a full-time investigation into Brookfield’s far-flung operations in late fall. Our reporting and research uncovered a series of earnings quality problems, the presence of a mostly hidden ownership group that effectively controls Brookfield’s governance and corporate structure, and a business model that involves heavy reliance on related-party transactions with its subsidiaries. Continue Reading →
Filed under: Stories
The Infernal Machine: From Powder to Dust
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To understand why a company called ViSalus is the fastest-growing company of its size in the United States, just watch cofounder Nick Sarnicola in action at one of the company’s periodic sales conferences. In the video that ViSalus posted on YouTube of a July conference in Miami, Sarnicola’s turbocharged pitch inside a packed 18,000-seat arena has people on their feet, pumping fists, clapping, waving, even dancing. A politician or entertainer can only dream of an audience response like this. People don’t usually pay good money to travel to Miami in sweltering summer heat and then readily wedge themselves into a packed arena to see someone strut around and talk on a hastily assembled theatrical stage — about a company whose major product is powder for a weight-loss shake. Sarnicola is an unlikely standard-bearer. Continue Reading →