Simon Property Group is America’s largest shopping center owner. The company operates approximately 4,000 properties across North America, Europe, and Asia. The REIT owns roughly 230 million square feet of retail space. Herbert Simon co-founded the company in 1995 alongside his late brother Melvin. He is now suing members of his own family over control of SFG Company LLC, a separate private entity that holds family real estate assets outside the publicly traded REIT.

David Simon, Herbert’s nephew, served as CEO of Simon Property Group until his death in March 2026 from pancreatic cancer. Less than two weeks before his death, David transferred assets held in SFG Company LLC to a newly created entity called SFG HoldCo LLC. Herbert Simon claims this transfer was made without the consent of equity holders whose special rights were supposed to be protected under the SFG operating agreement. According to the lawsuit, the original agreement required unanimous consent from affected equity holders before dissolving the company or eliminating special distribution rights. Herbert and other family members claim they were not informed about the transaction until after it was completed.

The SFG operating agreement gave certain equity holders, including Herbert and his brother Melvin, the right to greater distributions than other equity holders. The agreement also stated that the manager of SFG could not make unilateral changes without consent of each member directly impacted.

According to the complaint, David, who is manager of SFG, had discussed liquidating SFG with Herbert over previous years. During those negotiations, David allegedly insisted he had the right to buy out Herbert and other family members at discounted values. Herbert refused, proposing fair market value instead. The talks reached an impasse. Two weeks before his death, David proceeded with the asset transfer anyway, implementing the restructuring he could not achieve through negotiation.

Eli Simon, David’s son, took over as CEO of Simon Property Group after his father’s death. He is also listed as the manager of SFG. Eli has said that the lawsuit is a meritless complaint and that he remains focused on leading the company and delivering long-term shareholder value. The complaint filed by Herbert Simon and other family members seeks to revert SFG to its original corporate structure. It also requests compensatory and punitive damages.

Herbert Simon maintains that David used his control of the manager role to deprive plaintiffs of preferential interests. The lawsuit states that David kept his uncle in the dark intentionally because the restructuring benefited him and his family at the expense of Herbert and other equity holders. The case represents a dispute over whether the SFG operating agreement actually protected special rights or whether a manager with sufficient control could force a corporate restructuring. The outcome will determine whether Herbert and other family members recover their original equity position and damages, or whether the restructured arrangement that David implemented stands.

The governance structure at Simon Property Group has allowed founder family members to maintain significant control decades after the company’s creation. Herbert Simon’s ability to sue over decisions made at a parallel private company controlled by his nephew’s estate reveals how much remains concentrated in family hands despite public share ownership. For Simon Property Group shareholders, the dispute is technically separate from REIT operations. But the lawsuit between family factions over control of assets in the private company highlights risks of when family disputes can get in the way of family-run businesses.