OAK BROOK, Ill., Dec. 9 /PRNewswire-FirstCall/ --
Banyan Strategic Realty Trust (OTC Bulletin Board: BSRTS) announced today that
its Board of Trustees has resolved to terminate the Trust effective January 3,
2003. The termination and dissolution will be accomplished by the transfer of
all of Banyan's remaining assets and liabilities into the newly-formed BSRT
Liquidating Trust. The Board appointed current First Vice President and
General Counsel Robert G. Higgins as the Primary Liquidating Trustee and
current Interim President and CEO L. G. Schafran as the Secondary Liquidating
Trustee. The Primary Liquidating Trustee will be responsible for the
operation of the liquidating trust including the day-to-day administrative
tasks, while the Secondary Liquidating Trustee will act in an advisory role.
Banyan adopted a Plan of Termination and Liquidation on January 5, 2001.
The Plan called for the liquidation of all of Banyan's assets as soon as
practical and provided that a liquidating trust could be established if, in
the judgment of Banyan's Board of Trustees, all liabilities could not be
discharged or adequately provided for within a two-year period. Banyan has
sold its entire real estate portfolio, realizing more than $250 million in
gross proceeds, and has, to date, made liquidating distributions totaling
$5.45 per share to its shareholders. However, Banyan remains involved in a
lawsuit with its suspended President, Leonard G. Levine, that has been pending
since October of 2000. Banyan announced in October of 2002 that no further
distributions would be made to its shareholders until the litigation with Mr.
Levine was completed. No trial date is currently scheduled, but the Trust
believes that the case will be tried during the second quarter of 2003. A
motion to extend the current January 31, 2003 discovery cutoff date has been
filed by Mr. Levine's attorneys. If this motion is granted, the trial date
could be further delayed.
Banyan's distribution of assets and liabilities into the BSRT Liquidating
Trust on January 3, 2003 will mark the termination of Banyan Strategic Realty
Trust. Except for certain of Banyan's present and former employees who have
opted to forfeit shares pledged to secure non-recourse loans, each of Banyan's
shareholders will automatically receive an uncertificated interest in the BSRT
Liquidating Trust, equal to their pro-rata ownership interest in Banyan. The
Liquidating Trust interests will not be listed on any stock exchange and will
not be exchangeable or transferable, except by death or operation of law. The
last day of trading on the Over the Counter Bulletin Board in Banyan's shares
of beneficial interest will be January 2, 2003.
The transfer into the Liquidating Trust constitutes a distribution, in
kind, to Banyan's shareholders, the effect of which must be reported by
Banyan's shareholders on their individual income tax returns for the year 2003
(filed in the spring of 2004). Since Banyan will no longer be in existence,
the BSRT Liquidating Trust will fulfill Banyan's obligation to cause Form
1099's to be issued to Banyan's shareholders for the calendar year 2002 and
for the distribution into the liquidating trust in January of 2003. The 2002
Form 1099 will reflect each shareholder's allocated portion of the liquidating
distributions made in 2002. The 2003 1099 will reflect each shareholder's
allocated portion of the distribution into the liquidating trust.
In other news, Banyan announced that its Board of Trustees has awarded
bonus compensation of $400,000.00 to Interim President and CEO L.G. Schafran
in recognition of his efforts in and contribution to the success of Banyan's
liquidation, especially in the closing of the Denholtz transaction ($185.25
million) in May of 2001. Mr. Schafran became the company's chief executive
officer upon the suspension of Mr. Levine in August of 2000, and has served in
that capacity, as well as serving as Chairman of the Board of Trustees, since
then. Three-quarters of Mr. Schafran's bonus compensation had previously been
accrued for in the Trust's financial statements as of September 30, 2002,
under the line item "Accrued Severance and Termination Costs."
Banyan also announced that it has withdrawn its request for a no-action
letter from the Securities and Exchange Commission ("SEC"). Banyan submitted
its original request in late August. After engaging in a discussion with
representatives of the SEC in early October, Banyan provided additional
information and a revised request on October 16.
Additional discussions were held on November 21, 2002, at the conclusion
of which Banyan's trustees determined that the request for no-action relief
should be withdrawn. Commenting on the dialogue with the SEC, Banyan's
General Counsel, Robert G. Higgins, said: "Banyan elected to withdraw its
request for no-action and to, instead, rely on the precedent of other similar
requests that have been granted, when it became apparent that the SEC would
have been unable to complete the necessary review process in the time period
required by Banyan. We are confident that prior rulings in very similar
circumstances provide us with the guidance we need in this instance. We
appreciate the time and efforts of the SEC, especially in view of the myriad
of other issues currently being considered by the Commission."
Banyan Strategic Realty Trust is an equity Real Estate Investment Trust
(REIT) that adopted a Plan of Termination and Liquidation on January 5, 2001.
On May 17, 2001, the Trust sold approximately 85% of its portfolio in a single
transaction. The remaining properties were sold on April 1, 2002, May 1, 2002
and October 16, 2002. Since adopting the Plan of Termination and Liquidation,
Banyan has made liquidating distributions totaling $5.45 per share. As of
this date, the Trust has 15,496,806 shares of beneficial interest outstanding.
Except for the historical information contained herein, certain matters
discussed in this release are forward-looking statements, the achievement of
which involve risks and uncertainties, such as the amount of any remaining
liquidating distributions, the outcome of pending litigation and other risks
and uncertainties that are detailed from time to time in the Trust's reports
filed with the Securities and Exchange Commission, including the report on
Form 10-K for the year ended December 31, 2001 which was filed with the
Securities and Exchange Commission on March 21, 2002. Please see also the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" section which was included in our Form 10-Q for the quarter ended
September 30, 2002 which was filed with the Securities and Exchange Commission
on November 6, 2002. Without limitation, the foregoing words such as
"anticipates", "expects", "intends", "plans", and similar expressions are
intended to identify forward-looking statements.
See Banyan's Website at http://www.banyanreit.com.
SOURCE Banyan Strategic Realty Trust
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Related links:
http://www.banyanreit.com
CONTACT:
Robert G. Higgins, First Vice President,
General Counsel, +1-630-218-7255, bhiggins@banyanreit.com , or
Investor Relations, L.G. Schafran, Chairman and Interim
CEO-President, +1-630-218-7250, ir@banyanreit.com , both of
Banyan Strategic Realty Trust
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