Moolah-Moolah

The Bucksbaum family seemed to do everything right as family-business owners.

Starting out with single shopping center in Cedar Rapids, Iowa, brothers Martin and Matthew became early pioneers of the indoor-mall industry. They built their malls in smaller towns, grew cautiously and maintained fairly moderate debt levels.

John Lee/Tribune

John Bucksbaum

Martin, the stronger personality, was a workaholic and rare breed of executive who was a marketing expert and finance whiz. His keen eye for value even caught the attention of Warren Buffett, who once served on their board.

As a family, the Bucksbaums lived modestly and never sought the spotlight. In reporting our article about the Bucksbaum family today, I came across a telling anecdote: This year, Matthew Bucksbaum was named Philanthropist of the Year in Aspen for a $25 million pledge to the Aspen Music Festival. But he declined to attend the award dinner, saying he was uncomfortable being honored.

Perhaps he also was uncomfortable being celebrated as the family business–and their fortune–takes a tumble. The share price of that business, General Growth Propoerties, is down more than 96% this year, and the family?s ownership stake–once valued at more than $4 billion, is now at about $112 million.

What went wrong? The main culprit is their debt structure and relying too heavily on commercial backed mortgage securities. But the other reason is weak oversight–by Chief Executive John Bucksbaum and his finance chief, Bernie Freibaum.

It would be easy to say that the fatal decision was naming John Bucksbaum as the CEO. Let’s face it, his main qualification for the job was his last name, though he was well trained by his dad and uncle.

Another explanation is that the company?s problems stem not from the family?s over-involvement–but from their lack of involvement. People close to the family told us that Martin, who died in 1995, was so engaged in the smallest of details at the company that he never would have let the debt get out of control. John, by contrast, delegated more and more to his finance chief.

Whatever the case, the fall of the Bucksbaums shows that family?s can still be the best stewards of publicly traded companies–provided that the right family members are in charge.