FORM 20-F/A Brookfield Property Partners L.P. - Brookfield Asset ...

connection with a particular transaction or matter permitted thereby. In certain circumstances, these transactionsmay be related party transactions for the purposes of, and subject to certain requirements of, MultilateralInstrument 61-101 — Protection of Minority Security Holders in Special Transactions, or MI 61-101. MI 61-101provides a number of circumstances in which a transaction between an issuer and a related party may be subjectto valuation and minority approval requirements. See “Canadian Securities Law Exemptions” below forapplication of MI 61-101 to our company.The conflicts policy states that conflicts be resolved based on the principles of transparency, third-partyvalidation and approvals. The policy recognizes the benefit to us of our relationship with Brookfield and ourintent to pursue a strategy that seeks to maximize the benefits from this relationship. The policy also recognizesthat the principal areas of potential application of the policy on an ongoing basis will be in connection with ouracquisitions and our participation in Brookfield led consortiums and partnership arrangements, together with anymanagement or service arrangements entered into in connection therewith or the ongoing operations of theunderlying operating entities.In general, the policy provides that acquisitions that are carried out jointly by us and Brookfield, or in thecontext of a Brookfield-led or co-led consortium or partnership be carried out on the basis that the considerationpaid by us be no more, on a per share or proportionate basis, than the consideration paid by Brookfield or otherparticipants, as applicable. The policy also provides that any fees or carried interest payable in respect of ourproportionate investment, or in respect of an acquisition made solely by us, must be credited in the mannercontemplated by the Property Partnership’s limited partnership agreement, where applicable, or that such fees orcarried interest must either have been negotiated with another arm’s length participant or otherwise demonstratedto be on market terms (or better). The policy generally provides that if the acquisition involves the purchase by usof an asset from Brookfield, or the participation in a transaction involving the purchase by us and Brookfield ofdifferent assets, that a fairness opinion or, in some circumstances, a valuation or appraisal by a qualified expertbe obtained. These requirements provided for in the conflicts policy are in addition to any disclosure, approval,or valuation requirements that may arise under applicable law.Our limited partnership agreement and the limited partnership agreement of the Property Partnershipcontain various provisions that modify the fiduciary duties that might otherwise be owed to us and ourunitholders. These duties include the duties of care and loyalty. In the absence of provisions in the limitedpartnership agreements of our company and the Property Partnership to the contrary, the duty of loyalty wouldgenerally prohibit the BPY General Partner and the Property General Partner from taking any action or engagingin any transaction as to which it has a conflict of interest. The limited partnership agreements of our companyand the Property Partnership each prohibit the limited partners from advancing claims that otherwise might raiseissues as to compliance with fiduciary duties or applicable law. For example, the agreements provide that theBPY General Partner, the Property General Partner and their affiliates do not have any obligation under thelimited partnership agreements of our company or the Property Partnership, or as a result of any duties stated orimplied by law or equity, including fiduciary duties, to present business or investment opportunities to ourcompany, the Property Partnership, any Holding Entity or any other holding entity established by us. They alsoallow affiliates of the BPY General Partner and Property General Partner to engage in activities that maycompete with us or our activities. In addition, the agreements permit the BPY General Partner and the PropertyGeneral Partner to take into account the interests of third parties, including Brookfield, when resolving conflictsof interest.These modifications to the fiduciary duties are detrimental to our unitholders because they restrict theremedies available for actions that might otherwise constitute a breach of fiduciary duty and permit conflicts ofinterest to be resolved in a manner that is not always in the best interests of our company or the best interests ofour unitholders. We believe it is necessary to modify the fiduciary duties that might otherwise be owed to us andour unitholders, as described above, due to our organizational and ownership structure and the potential conflictsof interest created thereby. Without modifying those duties, the ability of the BPY General Partner and theProperty General Partner to attract and retain experienced and capable directors and to take actions that we129