SAN DIEGO, May 10 /PRNewswire-FirstCall/ -- Burnham Pacific Properties,
Inc. (NYSE: BPP) today announced that, in accordance with the Plan of Complete
Liquidation and Dissolution of Burnham previously approved by Burnham's
stockholders, Burnham intends to enter into a liquidating trust agreement (the
"Trust Agreement") on June 28, 2002 for the purpose of winding up Burnham's
affairs and liquidating Burnham's assets. It is currently anticipated that,
on June 28, 2002, Burnham will transfer its then remaining assets to (and its
then remaining liabilities will be assumed by) the Trustees (as defined below)
of the BPP Liquidating Trust, and Burnham will be dissolved. June 27, 2002
(the "Record Date") will be the last day of trading of Burnham common stock on
the New York Stock Exchange, and Burnham's stock transfer books will be closed
as of the close of business on such date.
Under the terms of the proposed Trust Agreement, on June 28, 2002, each
stockholder of Burnham on the Record Date (each, a "beneficiary")
automatically will become the holder of one unit of beneficial interest
("Unit") in the BPP Liquidating Trust for each share of Burnham common stock
then held of record by such stockholder. After June 28, 2002, all outstanding
shares of Burnham common stock automatically will be deemed cancelled, and the
rights of beneficiaries in their Units will not be represented by any form of
certificate or other instrument. Stockholders of Burnham on the Record Date
will not be required to take any action to receive their Units. The Trustees
will maintain a record of the name and address of each beneficiary and such
beneficiary's aggregate Units in the BPP Liquidating Trust. Subject to
certain exceptions related to transfer by will, intestate succession or
operation of law, the Units will not be transferable, nor will a beneficiary
have authority or power to sell or in any other manner dispose of any Units.
It is currently contemplated that the initial co-trustees (the "Trustees")
of the BPP Liquidating Trust will be Scott C. Verges and an unaffiliated third
party appointed by the board of directors of Burnham. Successor trustees may
be appointed to administer the BPP Liquidating Trust in accordance with the
terms of the Trust Agreement. It is expected that from time to time the BPP
Liquidating Trust will make distributions of its assets to beneficiaries, but
only to the extent that such assets will not be needed to provide for the
liabilities (including contingent liabilities) assumed by the BPP Liquidating
Trust. No assurances can be given as to the amount or timing of any
distributions by the BPP Liquidating Trust.
For federal income tax purposes, on June 28, 2002, stockholders of Burnham
on the Record Date will be deemed to have received a pro rata share of the
assets of Burnham to be transferred to the BPP Liquidating Trust, subject to
such stockholder's pro rata share of the liabilities of Burnham assumed by the
BPP Liquidating Trust. Accordingly, each stockholder will recognize gain or
loss in an amount equal to the difference between (x) the fair market value of
such stockholder's pro rata share of the assets of Burnham that are
transferred to the BPP Liquidating Trust, subject to such stockholder's pro
rata share of the liabilities of Burnham that are assumed by the BPP
Liquidating Trust and (y) such stockholder's adjusted tax basis in the shares
of Burnham common stock held by such stockholder on the Record Date.
The BPP Liquidating Trust is intended to qualify as a "liquidating trust"
for federal income tax purposes. As such, the BPP Liquidating Trust will be a
complete pass-through entity for federal income tax purposes and, accordingly,
will not itself be subject to federal income tax. Instead, for federal income
tax purposes, on June 28, 2002, stockholders of Burnham on the Record Date
will be deemed to have received, and therefore own, a pro rata share of the
assets transferred by Burnham to the BPP Liquidating Trust, subject to a pro
rata share of Burnham's liabilities assumed by the BPP Liquidating Trust, and
will be subject to the same federal income tax consequences with respect to
the receipt, ownership or disposition of such assets as if such stockholder
had directly received, owned or disposed of such assets, subject to such
liabilities. Accordingly, distributions, if any, of the Trust's assets to
beneficiaries of the BPP Liquidating Trust will not be taxable to such
beneficiaries, though beneficiaries will be required to take into account, in
accordance with their method of accounting, a pro rata share of the BPP
Liquidating Trust's items of income, deduction, gain, loss or credit,
regardless of the amount or timing of distributions to beneficiaries. The
Trustees will furnish to beneficiaries of the BPP Liquidating Trust a
statement of their pro rata share of the assets transferred by Burnham to the
BPP Liquidating Trust, less their pro rata share of Burnham's liabilities
assumed by the BPP Liquidating Trust. On a yearly basis, the Trustees also
will furnish to beneficiaries a statement of their pro rata share of the items
of income, gain, loss, credit and deduction of the BPP Liquidating Trust to be
included on their tax returns. Stockholders of Burnham are urged to consult
with their tax advisers as to the tax consequences to them of the
establishment and operation of, and distributions, if any, by, the BPP
Liquidating Trust.
This press release contains forward-looking statements that predict or
indicate future events that do not relate to historical matters. There are a
number of important factors that could cause actual events to differ
materially from those indicated by such forward-looking statements. These
factors include, but are not limited to, the following: Burnham may be unable
to transfer all of its remaining assets and liabilities to the BPP Liquidating
Trust if it fails to obtain all necessary third party consents to such
transfer or such transfer may be otherwise materially delayed; the BPP
Liquidating Trust may be unable to consummate sale transactions with respect
to some or all of Burnham's remaining properties or such sales may be
materially delayed; the BPP Liquidating Trust may not be able to complete the
liquidation in a timely manner or realize proceeds from the sales of assets in
amounts that will enable it to provide liquidating distributions to
beneficiaries; Burnham's board of directors may terminate the Plan of Complete
Liquidation and Dissolution due to unstable or unfavorable real estate or
financial market conditions or for any other reason; and occupancy rates and
market rents may be adversely affected by economic and market conditions which
are beyond our and the Trustees' control, including imbalances in supply and
demand for retail shopping center space and the financial condition of
tenants.
You should also read the risk factors that are discussed in Burnham's
periodic reports filed with the Securities and Exchange Commission, including
the risk factors that are contained in our Form 10-K for the year ended
December 31, 2001. You should be aware that the risk factors contained in
that Form 10-K may not be exhaustive. Therefore, we recommend that you read
the information in that Form 10-K together with other reports and documents
that we file with the SEC from time to time, including our Forms 10-Q and 8-K,
which may supplement, modify, supersede or update those risk factors.
Burnham assumes no obligation to update the forward-looking statements
included in this press release. However, if the board of directors of Burnham
should determine to extend the Record Date beyond June 27, 2002, Burnham will
issue a press release announcing such date. Further questions with respect to
the foregoing may be addressed to Mr. Daniel Platt, Chief Financial Officer,
at (619) 652-4700 or 110 West A Street, Suite 900, San Diego, CA 92101.
SOURCE Burnham Pacific Properties, Inc.
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Related links:
http://www.burnhampacific.com
CONTACT:
Daniel B. Platt, Chief Financial Officer of
Burnham Pacific Properties, Inc., +1-619-652-4700, fax
+1-619-652-4711, dbplatt@bpac.com
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