Brixmor Property Group Loses 20% After CEO, CFO & Other Executives Resign Following Audit Committee Review

Shares of Brixmor Property Group Inc BRX plunged more than 20 percent on Monday after the company announced that its CEO Michael Carroll, President and CFO Michael Pappagallo, Chief Accounting Officer Steven Splain, and an un-named accounting employee have all resigned from the company.

Brixmor Property stated that the resignation of the executives follows the completion of an Audit Committee review. The company's Board of Directors concluded from the review that "specific Company accounting and financial reporting personnel, in certain instances, were smoothing income items, both up and down, between reporting periods in an effort to achieve consistent quarterly same property net operating income ("same property NOI") growth, an industry non-GAAP financial measure."

Brixmor Property added in its press release that the company does not believe the amounts involved were material to its non-GAAP same property NOI or its GAAP financial results. As such, the company believes it will not be required to restate historical financial results and the event does not impact its financial strength and prospects.

Daniel Hurwitz, a former CEO of DDR Corp DDR and the founder and CEO of Raider Hill Advisors, LLC will serve as Interim Chief Executive Officer, effective immediately.

John Schreiber, Chairman of the Brixmor Board, stated, "The Board is disappointed to have learned of the conduct and lack of appropriate management supervision uncovered as a result of the Audit Committee review. Once the facts were known, we moved swiftly to take remedial action. We are fortunate to be able to bring in a seasoned real estate executive of Dan Hurwitz's caliber, who can lead the Company through this period and effectively manage our portfolio as we move to identify a new CEO and CFO."

Michael Berman, Chairman of the Brixmor Audit Committee, stated, "While the Board believes this issue does not materially impact our previously reported results, we also believe the integrity of our financial reporting is paramount. We have voluntarily reported this matter to the SEC."

Brixmor is rescheduling its 2015 fourth quarter earnings announcement, originally scheduled for today, February 8, 2016 and now expects to release full year 2015 fourth quarter results and 2016 guidance on Monday, February 29, 2016.