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Press release from Business Wire

Fairholme Funds Announce U.S. Bankruptcy Court Approval of Plan of Reorganization of General Growth Properties, Inc.

Thursday, October 21, 2010

Fairholme Funds Announce U.S. Bankruptcy Court Approval of Plan of Reorganization of General Growth Properties, Inc.16:00 EDT Thursday, October 21, 2010 MIAMI (Business Wire) -- Today the U.S. Bankruptcy Court issued an order approving the plan of reorganization of General Growth Properties, Inc. (Ticker: GGP). The plan includes a definitive agreement between GGP and each of The Fairholme Fund (Ticker: FAIRX) and The Fairholme Focused Income Fund (Ticker: FOCIX), each a series of Fairholme Funds, Inc. Pursuant to the agreement, the Funds, in the aggregate, have committed up to $2.5 billion and $58 million to acquire new equity capital of the reorganized GGP and The Howard Hughes Corporation, a planned spin-off company of GGP, respectively. The terms of the transaction are specified in the Stock Purchase Agreement between each Fund and GGP. Information about Fairholme Capital Management, L.L.C. and Fairholme Funds, Inc. Fairholme Capital Management, L.L.C. is the investment manager of The Fairholme Fund and The Fairholme Focused Income Fund. Fairholme Capital is registered with the SEC as an investment adviser and, as of September 30, 2010, has approximately $18 billion of assets under management. Operating and investment decisions for Fairholme Capital and the Funds are made by Bruce R. Berkowitz, in consultation with Charles M. Fernandez. Mr. Berkowitz is the founder and Managing Member of Fairholme Capital and the President and a Director of Fairholme Funds, Inc. Mr. Fernandez is the President of Fairholme Capital and the Vice-President and a Director of Fairholme Funds, Inc. Each Fund's investment objectives, risks, charges, and expenses should be considered carefully before investing.The prospectus contains this and other important information about the Fund, and may be obtained by calling shareholder services at 866-202-2263 or visiting our website at www.fairholmefunds.com.Read it carefully before investing. Investing in The Fairholme Fund involves risk, including loss of principal. The Fairholme Fund is non-diversified, which means that it invests in a smaller number of securities when compared to more diversified funds. Therefore, the Fund is exposed to greater individual stock volatility than a diversified fund. The Fairholme Fund also invests in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. Investing in The Fairholme Focused Income Fund involves risk, including loss of principal. The Fairholme Focused Income Fund is non-diversified, which means that it invests in a smaller number of securities when compared to more diversified funds. The Fund's investments are also subject to interest rate risk, which is the risk that the value of a security will decline because of a change in general interest rates. Investments subject to interest rate risk will usually decrease in value when interest rates rise and rise in value when interest rates decline. Also, securities with long maturities typically experience a more pronounced change in value when interest rates change. Shares of each Fund are offered through the Funds' distributor, Fairholme Distributors, Inc. Fairholme Capital Management, L.L.C.Bruce R. Berkowitz, 305-358-3000