Krasnoff says in a statement that the new capital structure would facilitate "many investment opportunities." Cerberus officials issued no comment on the transaction other than the initial release.

LNR was formed in 1997 to separate Lennar Corp.'s real estate investment, finance and management business from its homebuilding business. Earlier this year, GlobeSt.com reported that an entity owned equally by LNR and Lennar acquired Los Angles County, CA-based Newhall Land and Farming Co. for $1 billion. The JV is planning to develop a large-scale commercial and residential project on a tract of land in California that it acquired in the deal. A few weeks ago, LNR expaned its European base when its wholly-owned subsidiary Lennar Partners Europe acquired European commercial real estate loan servicer Hatfield Philips International

LNR's board voted unanimously to recommend that the stockholders approve the Riley transaction. Board chair Stuart A. Miller, partnerships and a family trust own more than a majority of the voting stock. Miller says the partnerships and trust agreed to vote their shares in favor of the merger as long as the board or the special committee recommend the transaction. The group will exchange a portion of their shares for an approximately 20.4% interest in Riley.