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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 29, 1997
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CleveTrust Realty Investors
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(Exact name of registrant as specified in its charter)
Massachusetts
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(State of other jurisdiction of incorporation)
0-5641 34-1085584
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(Commission File Number) (IRS Employer Identification No.)
2001 Crocker Road, Suite 400, Westlake, Ohio 44145
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(Address of principal executive offices)
Registrant's telephone number, including area code: 216/899-0909
Not Applicable
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(Former name or former address, if changed since last report)
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5. OTHER EVENTS
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On April 29, 1997 a Plan for the Orderly Liquidation (the "Plan") of
CleveTrust Realty Investors (the "Trust") was approved by the shareholders of
the Trust. Of the 5,136,616 shares eligible to vote 4,075,938 participated at
the meeting. The proposal to approve the Plan was approved by the holders of
4,070,003 shares, or approximately 79.2% of the outstanding shares, while 1,300
shares were voted against the Plan, and 4,635 shares abstained from voting on
the Plan.
7. FINANCIAL STATEMENTS AND EXHIBITS
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(c) Exhibits
99.1 Press Release dated April 29, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be filed on its behalf by the
undersigned hereunto duly authorized.
CLEVETRUST REALTY INVESTORS
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(Registrant)
Date: May 2, 1997 By: /s/ Raymond C. Novinc
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Raymond C. Novinc
Vice President, Secretary & Counsel
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EXHIBIT INDEX
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Exhibit
Number Description
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99.1 Press release dated April 29, 1997
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CLEVETRUST
REALTY INVESTORS
A Real Estate Trust
2001 Crocker Road Telephone 216/899-0909
Suite 400 Fax 216/899-1507
Westlake, Ohio 44145 [email protected]
NEWS RELEASE CONTACT: John J. Kikol, President
CleveTrust Realty Investors
FOR IMMEDIATE RELEASE (216) 899-0909
CLEVETRUST REALTY INVESTORS'
SHAREHOLDERS APPROVE
PLAN OR ORDERLY LIQUIDATION
WESTLAKE, OHIO, APRIL 29, 1997-John C. Kikol, Chairman and President of
CleveTrust Realty Investors (CTRIS-NASDAQ), announced at its 25th Annual
Shareholders Meeting held today in Westlake Ohio, that the Plan for the Orderly
Liquidation of the Trust (the "Plan") was approved by the Shareholders. Mr.
Kikol also announced that the Trust completed the sale of Spring Village
Shopping Center in Davenport, Iowa for $4,450,000, resulting in a gain of
approximately $675,000. As a result of recent property sales, the Trust has
approximately $13,000,000 in cash available for distribution to its
shareholders; and the Board approved the Trust's first liquidating
distribution in the amount of $2.50 per share of beneficial interest payable on
May 16, 1997, to Shareholders of record as of May 9, 1997. The Trust also
anticipates that the sale of its Executive Club Office Building in Denver,
Colorado should be completed during the next 45 days. Assuming the sale
occurs, an additional liquidating distribution in the amount of approximately
$1.00 per share of beneficial interest would be made during the month of June,
1997.
Furthermore, Mr. Kikol indicated that the Trust's three office buildings in
Dallas, Texas were being aggressively pursued by prospective buyers, which
should result in the sale of the three properties prior to the end of the 1997
calendar year. Assuming the sales occur, it is anticipated that proceeds from
the sales, less reserves for federal income taxes and other Trust expenses,
should result in additional liquidating distributions of approximately $2.00
per share of beneficial interest, and that liquidating distributions for the
1997 calendar year should be approximately $5.50 per share of beneficial
interest. It is anticipated that the remaining four properties will be sold
during calendar year 1998 and the liquidation process completed. The Trust
previously announced that the total liquidating distributions should have a
value in the range of $6.00 to $6.50 per share. As a result of prior and
anticipated sales, the Trust, today, revised its estimate of total liquidation
distributions to a value in the range of $6.50 to $7.00 per share. It is
important to emphasize that such forecasts are forward looking and that the
projected sales can be affected by many factors, including demand and
availability of similar properties in the local real estate markets and the
availability and terms of financing available for commercial real estate.
Other business matters approved by the shareholders at the Annual Meeting were
the election of Howard Amster, Robert Kanner, John Kikol, Leighton Rosenthal and
John Weil as Trustees to serve for a one year term, and the ratification of the
Amended and Restated Employment Agreement with Mr. Kikol effective September 1,
1996. As a result of the Trust's decision to recommend the Plan and the
anticipated Shareholders' approval of the Plan, the Trust classified
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(CleveTrust Realty Investors-con't.)
all of its assets as properties held for sale as of September 30, 1996. After a
review of all the Trust's properties as of September 30, 1996, it was determined
that four properties had a higher carrying value than the estimated fair market
value, less the cost to sell and a valuation reserve in the amount of $3,307,297
was established. As a result of the new valuation reserve, the Trust stopped
recording depreciation expense as of October 1, 1996 in its financial
statements. Furthermore, the Trust had begun to accrue severance and incentive
payments which will be paid to the officers and employees of the Trust upon
their termination, with the four principal officers to be paid in accordance
with the terms of their Amended and Restated Employment Agreements. Due to the
change in the Trust's business plan, we will discontinue reporting funds from
operations but will report Operating Income and Net Income on a quarterly basis.
For the three months ending March 31, 1997, the Trust had Operating Income of
$382,000 and Net Income of $6,976,000. Included in the Net Income were
previously reported Gains on Sales of Real Estate of $6,594,000. For the six
months ending March 31, 1997 the Trust had Operating Income of $902,000 and Net
Income of $8,072,000. Included in the Net Income were Gains on Sales of Real
Estate of $7,170,000, which have previously been reported by the Trust.
Comparisons to last year's financial results would not be applicable due to the
change in the business plan of the Trust.
<TABLE>
<CAPTION>
Three Months Ended March 31,
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Per Per
1997 Share 1996 Share
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<S> <C> <C> <C> <C>
Operating Revenues $ 2,412,000 $ 2,657,000
Less: Real Estate Operating Expenses (1,094,000) (1,282,000)
Less: Interest Expense (304,000) (436,000)
Less: General and Administrative Expenses (365,000) (190,000)
Less: Accrual for Severance Payments (267,000) 0
Less: Depreciation Expense 0 (433,000)
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Operating Income 382,000 $ 0.07 316,000 $ 0.06
Gain (loss) on Sales of Real Estate 6,594,000 1.28 (244,000) (0.05)
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NET INCOME $ 6,976,000 $ 1.35 $ 72,000 $ 0.01
======================= =======================
Weighted Average Number of Shares of
Beneficial Interest 5,136,616 5,179,143
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Six Months Ended March 31,
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Per Per
1997 Share 1996 Share
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<S> <C> <C> <C> <C>
Operating Revenues $ 4,926,000 $ 5,295,000
Less: Real Estate Operating Expenses (2,200,000) (2,534,000)
Less: Interest Expense (656,000) (846,000)
Less: General and Administrative Expenses (635,000) (385,000)
Less: Accrual for Severance Payments (533,000) 0
Less: Depreciation Expense 0 (883,000)
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Operating Income 902,000 $ 0.18 647,000 $ 0.12
Gain (loss) on Sales of Real Estate 7,170,000 1.39 (244,000) 0.05
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NET INCOME $ 8,072,000 $ 1.57 $ 403,000 $ 0.07
======================= ======================
Weighted Average Number of Shares of
Beneficial Interest 5,139,887 5,198,039
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</TABLE>
