<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Real Estate Fund Investment Trust
------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Real Estate Fund Investment Trust
------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[x] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
Shares of Beneficial Interest, par value $1
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
2,090,108
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
$4,050,000
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
$4,050,000
------------------------------------------------------------------------
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
--------------------------------------------
2) Form, Schedule or Registration Statement No.:
----------------------
3) Filing Party:
------------------------------------------------------
4) Date Filed:
--------------------------------------------------------
<PAGE> 2
CALCULATION OF FILING FEE
The filing fee of $810.00 was calculated in accordance with Exchange
Act Rule 0-11(c)(2) based upon the value of the property to be distributed to
shareholders, which is $4,050,000 less expenses of liquidation and the payment
of liabilities.
<PAGE> 3
REAL ESTATE FUND INVESTMENT TRUST
304 SOUTH MAIN STREET
POST OFFICE BOX 396
FOUNTAIN INN, SOUTH CAROLINA 29644
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 9, 1996
To the Shareholders of Real Estate Fund Investment Trust:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of Real
Estate Fund Investment Trust (the "Trust") will be held on December 9, 1996, at
11:30 a.m. at the Days Inn, I-385 and Frontage Road, Simpsonville, South
Carolina, for the purpose of considering and acting upon the following:
1. The proposal to adopt the Plan of Complete Liquidation
pursuant to which the assets of the Trust would be distributed
to its shareholders and the Trust would be terminated; and
2. Such procedural matters, including without limitation
potential adjournments of the Special Meeting, as may properly
come before the Special Meeting or any adjournments or
postponements thereof.
Shareholders of record at the close of business on November 18, 1996
will be entitled to vote at the Special Meeting.
By Order of the Board of Trustees
Stewart H. Garrett
Secretary
Fountain Inn, South Carolina
November 25, 1996
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE
POSTAGE-PAID ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING.
IF YOU WISH, YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR SHARES IN PERSON AT THE
SPECIAL MEETING.
<PAGE> 4
REAL ESTATE FUND INVESTMENT TRUST
304 SOUTH MAIN STREET
POST OFFICE BOX 396
FOUNTAIN INN, SOUTH CAROLINA 29644
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD DECEMBER 9, 1996
This Notice of Special Meeting, Proxy Statement and Proxy (these
"Proxy Materials") are being furnished to shareholders in connection with a
solicitation of proxies by the Board of Trustees of the Real Estate Fund
Investment Trust (the "Trust"). This solicitation is being made in connection
with the Special Meeting of Shareholders (the "Special Meeting") to be held on
December 9, 1996, at 11:30 a.m. at the Days Inn, I-385 and Frontage Road,
Simpsonville, South Carolina. These Proxy Materials are being mailed to
shareholders on November 25, 1996.
Voting Matters
Shareholders of record as of the close of business on November 18, 1996
will be entitled to vote at the Special Meeting. At the close of business on
that day, there were 2,090,108 shares of the Trust's shares of beneficial
interest, par value $1 per share ("Shares") outstanding. Holders of Shares are
entitled to one vote per Share on each of the matters presented at the Special
Meeting or any adjournments thereof. Shares may be voted in person or by
proxy. The presence, either in person or by proxy, of holders of Shares
representing 30% of the outstanding Shares entitled to vote at the Special
Meeting is necessary to constitute a quorum at the Special Meeting. Abstentions
and broker non-votes are each included in the determination of the number of
Shares present for purposes of determining whether a quorum exits. Abstentions
and broker non-votes are counted as a vote against Proposal One to adopt the
Plan of Complete Liquidation. Proposal One requires the affirmative vote of a
majority of the issued and outstanding Shares.
Revocability of Proxy
Shares represented by a properly executed proxy in the accompanying form
and given by a shareholder, and not revoked, will be voted in accordance with
such instructions. As stated in the Proxy, if a returned Proxy does not
specify otherwise, the Shares represented thereby will be voted in favor of the
proposals set forth herein. Proxies may be revoked at any time prior to their
being voted at the Special Meeting by oral or written notice to Real Estate
Fund Investment Trust, 304 South Main Street, Post Office Box 396, Fountain
Inn, South Carolina 29644, Attn: Stewart H. Garrett, Secretary (864)
862-3765, or by execution and delivery of a subsequent proxy or by attendance
and voting in person at the Special Meeting.
Solicitation of Proxies
This solicitation of proxies is made by the Board of Trustees, and the
Trust will bear the cost of this proxy solicitation, including the cost of
preparing, handling, printing and mailing these Proxy Materials. Proxies will
be solicited principally through these Proxy Materials. Proxies may also be
solicited by telephone or through personal solicitation conducted by regular
employees of the Trust. Banks, brokers and other custodians are requested to
forward proxy solicitation material to their customers where appropriate, and
the Trust will reimburse such banks, brokers and custodians for their
reasonable out-of-pocket expenses in sending the proxy material to beneficial
owners of the Shares.
<PAGE> 5
ADOPTION OF THE PLAN OF COMPLETE LIQUIDATION
Item 1 on the Proxy
SALE OF ASSETS
Pursuant to a purchase agreement dated August 28, 1996, on October 1,
1996 the Trust sold and transferred to Younts Properties, Inc. ("YPI") all of
its assets for a price of $4.05 million (representing $1.92 for each of the
Trust's 2,090,108 issued and outstanding Shares), paid in cash. Under South
Carolina law, because the purchase agreement does not provide for either the
assumption or exclusion of liabilities relating to the assets, YPI has assumed
such liabilities as a matter of law. The liabilities relating to the assets
represent substantially all of the liabilities of the Trust relating to the
conduct of its business.
PLAN OF COMPLETE LIQUIDATION
Holders of Shares are requested to approve the adoption by the
shareholders of the Plan of Complete Liquidation attached hereto as Appendix A
(the "Plan"). No federal or state regulatory approvals are required in
connection with the Plan. A summary of the provisions of the Plan is set forth
below, but is qualified in its entirety by reference to the Plan.
First Liquidating Distribution. Subject to the approval by the holders
of the Shares at the Special Meeting, as soon as practicable after December 9,
1996, and in no event later than December 31, 1996, the Trust shall send notice
to the holders of Shares notifying them of the liquidation and instructing them
to return to a special post office box established by the Trust for purposes of
the liquidation their Share certificates, together with any other documents that
the Trustees or Independent Agent (as defined below) may require, whereupon such
holders' pro rata share of the First Liquidating Distribution hereunder shall be
sent to them based on their Shares surrendered. No funds shall be paid to the
holders of Shares except upon proper receipt by the Trust of the surrendered
Share certificates, or evidence reasonably satisfactory to the Independent Agent
that such certificates have been lost or destroyed. The First Liquidating
Distribution shall be an aggregate of approximately $3,735,000, or approximately
$1.79 per Share, which represents ninety percent (90%) of the funds received
pursuant to the asset sale to YPI and the Trust's cash on hand.
The actual disbursement of funds to holders of Shares will be made by
the Trust; however, all disbursements of funds and acceptances of Shares for
payment shall be approved by an independent certified public accountant
retained by the Trust for such purpose (the "Independent Agent"). Holders of
record on December 9, 1996 will be the holders of Shares entitled to receive
the liquidating distributions.
Remaining Funds. All of the Trust's funds not distributed to holders
of Shares in the First Liquidating Distribution will be held by the Trust for
the purpose of paying any known liabilities, which shall be paid as promptly as
practicable, and for the purpose of paying any expenses of the Trust, including
but not limited to any expenses incurred in connection with the liquidation,
or unknown liabilities that arise after December 9, 1996.
Second Liquidating Distribution. Subject to shareholder approval of
the Plan, as soon as practicable after December 9, 1997, but in any event no
later than December 31, 1997 (unless such date is postponed by vote of a
majority of the Trustees then alive), the Trust, as instructed by the
Independent Agent, shall send to all former holders of Shares who received a
notice of the First Liquidating Distribution, a second liquidating distribution
(or in the case of former holders of Shares who have not surrendered their
Share certificates, notice of such second liquidating distribution) consisting
of all remaining funds (if any) of the Trust held for the purposes of paying
known or unknown liabilities and expenses. There is no assurance that any
assets will be available for distribution to the former holders of Shares in
the Second Liquidating Distribution. In addition, even if the Second
Liquidating Distribution were to occur, it could be postponed by the Trustees
for several years pending the resolution of the Trust's contingent and unknown
liabilities.
2
<PAGE> 6
Unlocated Shareholders. Any assets held by the Trust for distribution
to holders of Shares who cannot be located after reasonable efforts shall be
transferred by the Trust to a state official, trustee, or other person
authorized by law to receive distributions for the benefit of such
shareholders, in such manner as may be determined by the Trustees. Such assets
shall thereafter be held by such official on the same terms and in accordance
with the usual treatment accorded such funds under state law.
REASONS FOR THE PLAN AND DISSOLUTION OF THE TRUST
The Trustees believe that the Plan is in the best interests of the
holders of the Shares. The relatively small size of the Trust, when coupled
with the reporting requirements by the SEC and the Internal Revenue Service,
resulted in the Trust suffering from high expenses related to the reporting
requirements, thus hampering the ability of the Trust to grow. The Trustees
considered alternatives to the Plan and termination of the Trust, including
without limitation seeking a new line of business for the Trust to pursue or
the acquisition of additional real estate assets. Such alternatives would have
had no effect on the outstanding securities of the Trust or the rights of
holders of the Shares. However, the Trustees determined that the Plan and
termination of the Trust provided the largest possible return on investment to
holders of the Shares, that the risks inherent in pursuing any of the
alternatives outweighed the possible benefits, that the restrictive nature of
the organizational documents of the Trust would unduly restrict the Trust's
ability to explore alternatives to the Plan, and that the continued expenses
relating to the SEC and Internal Revenue Service reporting requirements would
decrease the value of the assets of the Trust.
EFFECT OF PLAN ON TRUST SHARES
The Plan substantially affects the outstanding securities of the Trust
and the rights of holders of the Shares. Under the Plan, each holder is
entitled to receive, in exchange for the cancellation of his or her Shares, his
or her pro rata share of the assets, if any, remaining after the payment of all
of the Trust's liabilities and appropriate provision for its contingent
liabilities. There is no assurance that any assets will be available for
distribution to the former holders of Shares in the Second Liquidating
Distribution. In addition, even if the Second Liquidating Distribution were to
occur, it could be delayed for several years pending the resolution of the
Trust's contingent and unknown liabilities.
The Trustees believe that the Plan is in the best interests of the
holders of the Shares. The Trustees considered alternatives that would not
have affected the rights of holders of the Shares but concluded that adoption
of the Plan and dissolution of the Trust was the most favorable alternative for
holders. See "Reasons for the Plan and Dissolution of the Trust".
FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
The receipt of funds pursuant to the First Liquidating Distribution
and the Second Liquidating Distribution by holders of Shares should generally
result in capital gain or loss to the holder equal to the difference between
the amount of consideration received and the holder's federal income tax basis
in his or her Shares. Such capital gain or loss will be long-term capital gain
or loss for federal income tax purposes if the holder's holding period of the
Shares is longer than one year.
The foregoing summary is a general discussion of certain of the United
States federal income tax consequences of the Plan of Liquidation. This
summary is based upon laws, regulations, rulings and decisions now in effect,
all of which are subject to change. No rulings as to any of the matters
discussed in this summary have been requested or received from the Internal
Revenue Service. EACH HOLDER OF SHARES IS URGED TO CONSULT AND RELY ON THE
HOLDER'S OWN TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO THE HOLDER OF
THE PLAN.
PLEASE DO NOT SEND IN YOUR SHARE CERTIFICATES AT THIS TIME. YOU WILL RECEIVE
SPECIAL INSTRUCTIONS FROM THE TRUST AT THE APPROPRIATE TIME.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL ONE.
3
<PAGE> 7
THE TRUST
The Trust was organized pursuant to a Declaration of Trust dated March
1, 1972, and filed with the Office of the Secretary of State for the State of
South Carolina on April 12, 1972. The Trust is a real estate investment trust
under the business trust laws of the State of South Carolina and qualified for
tax purposes as a real estate investment trust under the Internal Revenue Code,
as amended.
Prior to the sale of substantially all of its assets to YPI, the Trust
was engaged in the business of investing in, managing and leasing real estate
interests located in North Carolina, South Carolina and Georgia. The Trust
owned properties that were leased to individuals and businesses and included
shopping center complexes, trucking terminals, post office buildings, service
station buildings, and other office and commercial buildings and structures
such as restaurant facilities, convenience food stores and miscellaneous
businesses offering services and products to the general public.
The holders of Shares of the Trust voted to direct the Trustees to
develop a formal plan of liquidation by selling the assets of the Trust in May
1989. The sale to YPI of substantially all of the assets of the Trust, which
did not require the approval of the holders of the Shares under the Declaration
of Trust, effectively terminated the Trust's real estate investment, management
and leasing businesses.
After consummation of the asset sale to YPI, the only assets retained
by the Trust are cash, rent receivables, and a small amount of prepaid
expenses. Actions are currently being taken to collect these outstanding rent
receivables.
The Trust is not a party to any pending legal proceedings and is not
aware that any such proceedings are threatened against it at this time.
MARKET PRICE AND DIVIDENDS ON SHARES
There is no established public trading market for the Shares. The
Trust acts as its own transfer agent. As of November 13, 1996, the Trust had
400 shareholders. The Trust does not maintain information about the sale price
of Shares and is not provided such information when requested to transfer
Shares on its books. Therefore, no current or historical data about the
trading prices of the Shares is available.
The dividends paid by the Trust for each fiscal quarter from January
1994 to the present is set forth below under "Supplemental Financial
Information". If the proposed liquidation is approved, the Trust will not pay
its customary December dividend, but will instead distribute to holders of
Shares the First Liquidating Distribution.
INTERESTS OF CERTAIN PERSONS IN THE PLAN
As set forth below in "Security Ownership of Certain Beneficial Owners
and Management", each of the Officers and most of the Trustees of the Trust owns
Shares of the Trust. If the holders approve the Plan, each of the Officers and
Trustees of the Trust will receive a pro rata share of the funds to be
distributed in the liquidating distributions in accordance with their ownership
of Shares of the Trust.
Mr. Younts is the owner of YPI, the corporation that purchased the
Trust's assets. YPI does not own any Shares and does not have an interest in
the Plan.
4
<PAGE> 8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Trust knows of no person who, or group that, owns beneficially
more than 5% of the outstanding Shares of the Trust as of November 13, 1996,
except as set forth below:
<TABLE>
<CAPTION>
Name and Address Amount of Percent
of Beneficial Owner Beneficial Ownership(2) of Class
- ------------------- -------------------- --------
<S> <C> <C>
William R. Timmons, Jr. 209,604 10.03%
P.O. Box 1805
Greenville, SC 29601
Furman University 166,424 7.96%
Poinsett Highway
Greenville, SC 29613
Blake P. Garrett, Jr. 143,217 6.85%
P.O. Box 36
Fountain Inn, SC 29644
- ---------------------
</TABLE>
The information below is furnished as of November 13, 1996 as to
Shares owned beneficially or of record by each of the Trustees individually, by
certain named officers and by all Trustees and officers of the Trust as a
group. Unless otherwise noted, each person has sole voting power and sole
investment power with respect to Shares listed.
<TABLE>
<CAPTION>
Name and Address Amount of Percent
of Beneficial Owner Beneficial Ownership(2) of Class
- ------------------- -------------------- --------
<S> <C> <C>
TRUSTEES
- --------
Douglas C. Brown 10,359 (1)
Paul B. Costner, Jr. 49,148 2.35%
David H. Garrett 32,923 1.58%
Paul S. Goldsmith 64,350 3.08%
Wendy Beth Libby 0 0
William R. Timmons, Jr., 209,604 10.03%
Chairman
R. Wayne Weaver 0 0
Melvin K. Younts 64,755 3.10%
OFFICERS
- --------
G. B. Nalley, Jr.* 56,000(3) 2.68%(3)
President
Blake P. Garrett, Jr.* 143,217 6.85%
Vice President
Stewart H. Garrett* 54,875 2.63%
Secretary/Treasurer
Trustees and Officers as 685,231 32.78%
a group (11 persons)
- -------------------------
Footnotes appear on next page
</TABLE>
5
<PAGE> 9
*Also a Trustee.
(1) Each of these persons owns less than one percent of the outstanding
Shares of the Trust.
(2) The beneficial ownership stated above represents sole voting and
investment power, except as indicated in the footnotes above.
(3) These Shares are owned by a corporation in which Mr. Nalley is a 10%
shareholder. Mr. Nalley does not own any Shares directly, and he
disclaims beneficial ownership of the corporation's Shares.
Other than the cancellation of Trust Shares in exchange for a pro rata portion
of the Trust assets that will affect all of the holders of Trust Shares in the
same manner, there will be no effect on the ownership of Trust Shares by the
foregoing individuals. See "Effect of Plan on Trust Shares".
SELECTED FINANCIAL DATA
The following selected financial and operating data at and for the
five years ended December 31, 1995 are derived from the audited financial
statements of the Trust. The data set forth below is qualified by reference to,
and should be read in conjunction with, "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and the Trust's Supplemental
Financial Information and Notes thereto included elsewhere herein.
<TABLE>
<CAPTION>
(UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------------------------
9/30/96 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA (1)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUE $ 663,893 $ 956,813 $ 939,741 $ 965,233 $ 967,025 $1,051,017
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME FROM CONTINUING
OPERATIONS 94,634 214,061 301,982 320,089 231,717 300,980
- ---------------------------------------------------------------------------------------------------------------------------------
GAIN ON SALES OF REAL ESTATE, NET 55,385 644,831 - 453,216 147,509 25,953
OF TAXES
- ---------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 150,019 $ 858,892 $ 301,982 $ 773,305 $ 379,226 $ 326,933
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OF COMMON STOCK:
NET INCOME $ 0.07 $0.41 $ 0.14 $ 0.37 $ 0.18 $ 0.15
- ---------------------------------------------------------------------------------------------------------------------------------
CASH DIVIDENDS PAID 0.09 0.47 0.16 0.28 0.18 0.17
- ---------------------------------------------------------------------------------------------------------------------------------
BOOK VALUE $ 1.34 $ 1.36 $ 1.42 $ 1.44 $ 1.35 $ 1.35
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET DATA
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $2,967,341 $2,976,327 $3,208,864 $3,258,609 $3,043,326 $3,304,128
- ---------------------------------------------------------------------------------------------------------------------------------
LONG-TERM DEBT - - - - $ 134,754 $ 228,130
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------------------
(1) On October 1, 1996 the Trust sold all of its real estate
holdings, all mortgage notes receivable and personal property for
$4,050,000. The Trust will report a gain of approximately $1,500,000 (or
approximately 72 cents per share) due to this transaction.
6
<PAGE> 10
HISTORICAL PER SHARE DATA
<TABLE>
<CAPTION>
(UNAUDITED)
- -------------------------------------------------------------------------------------------------------------
SEP-96 DEC-95 DEC-94 DEC-93 DEC-92 DEC-91
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BOOK VALUE PER SHARE $1.34 $1.36 $1.42 $1.44 $1.35 $1.35
- -------------------------------------------------------------------------------------------------------------
CASH DIVIDEND DECLARED PER SHARE 0.09 0.47 0.16 0.28 0.18 0.17
- -------------------------------------------------------------------------------------------------------------
INCOME PER SHARE FROM:
- -------------------------------------------------------------------------------------------------------------
CONTINUING OPERATIONS - 0.1 0.14 0.15 0.11 0.14
- -------------------------------------------------------------------------------------------------------------
GAIN ON SALES OF REAL ESTATE,
NET OF TAXES - 0.31 - 0.22 0.07 0.01
- -------------------------------------------------------------------------------------------------------------
</TABLE>
SUPPLEMENTAL FINANCIAL INFORMATION
QUARTERLY INCOME STATEMENT DATA (UNAUDITED)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
1996 Sept. 30 June 30 March 31
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total revenue $ 229,891 $ 212,779 $ 221,223
------------------------------------------------------------------------------------------------
Total expenses 220,111 182,520 165,528
--------- --------- ---------
------------------------------------------------------------------------------------------------
Income from operations before income taxes 9,780 30,259 55,695
------------------------------------------------------------------------------------------------
Provision for Federal & state income taxes 200 900
--------- ---------
------------------------------------------------------------------------------------------------
Income from continuing operations 9,780 30,059 54,795
------------------------------------------------------------------------------------------------
Gain on sales of real estate, net of taxes 55,385
------------------------------------------------------------------------------------------------
Net Income $ 9,780 $ 30,059 $ 110,180
========= ========= =========
------------------------------------------------------------------------------------------------
Income per share of Beneficial Interest
Income from operations - $ 0.01 $ 0.025
Gain on sale of equity investments in real estate - - 0.025
--------- --------- ---------
------------------------------------------------------------------------------------------------
- $ 0.01 $ 0.050
========= ========= =========
------------------------------------------------------------------------------------------------
Number of share used in computation 2,090,108 2,090,108 2,090,108
------------------------------------------------------------------------------------------------
Dividends declared/paid per share $ 0.03 $ 0.03 $ 0.03
------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 11
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
1995 Dec. 31 Sept. 30 June 30 March 31
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total revenue $ 248,806 $ 233,039 $ 237,670 $ 237,298
- ---------------------------------------------------------------------------------------------------------------
Total expenses 192,527 192,511 177,239 177,225
--------- --------- --------- ---------
- ---------------------------------------------------------------------------------------------------------------
Income from operations before income taxes 56,279 40,528 60,431 60,073
- ---------------------------------------------------------------------------------------------------------------
Provision for Federal & state income taxes 550 800 800 1,100
--------- --------- --------- ---------
- ---------------------------------------------------------------------------------------------------------------
Income from continuing operations 55,729 39,728 59,631 58,973
- ---------------------------------------------------------------------------------------------------------------
Gain on sales of real estate, net of taxes 440,934 64,696 139,201
--------- --------- --------- ---------
- ---------------------------------------------------------------------------------------------------------------
Net Income $ 496,663 $ 39,728 $ 124,327 $ 198,174
========= ========= ========= =========
- ---------------------------------------------------------------------------------------------------------------
Income per share of Beneficial Interest
Income from operations $ 0.02 $ 0.02 $ 0.03 $ 0.3
Gain on sale of equity investments in real estate 0.21 0.00 0.03 0.07
--------- --------- --------- ---------
- ---------------------------------------------------------------------------------------------------------------
$ 0.23 $ 0.02 $ 0.06 $ 0.10
========= ========= ========= =========
--------------------------------------------------------------------------------------------------------------
Number of share used in computation 2,090,108 2,090,108 2,090,108 2,090,108
--------------------------------------------------------------------------------------------------------------
Dividends declared/paid per share $ 0.32 $ 0.05 $ 0.05 $ 0.05
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
1994 Dec. 31 Sept. 30 June 30 March 31
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total revenue $ 261,041 $ 226,900 $ 229,747 $ 222,053
--------------------------------------------------------------------------------------------------------------
Total expenses 140,399 148,435 176,710 168,415
--------- --------- --------- ---------
--------------------------------------------------------------------------------------------------------------
Income from operations before income taxes 120,642 78,465 53,037 53,638
--------------------------------------------------------------------------------------------------------------
Provision for Federal & state income taxes 1,400 1,200 200 1,000
--------- --------- --------- ---------
--------------------------------------------------------------------------------------------------------------
Income from continuing operations 119,242 77,265 52,837 52,638
--------------------------------------------------------------------------------------------------------------
Gain on sales of real estate, net of taxes
--------------------------------------------------------------------------------------------------------------
Net Income $ 119,242 $ 77,265 $ 52,837 $ 52,638
========= ========= ========= =========
--------------------------------------------------------------------------------------------------------------
Income per share of Beneficial Interest
Income from operations $ 0.06 $ 0.04 $ 0.03 $ 0.03
Gain on sale of equity investments in real estate - - - -
--------- --------- --------- ---------
--------------------------------------------------------------------------------------------------------------
$ 0.06 $ 0.04 $ 0.03 $ 0.03
========= ========= ========= =========
--------------------------------------------------------------------------------------------------------------
Number of share used in computation 2,090,108 2,090,108 2,090,108 2,090,108
--------------------------------------------------------------------------------------------------------------
Dividends declared/paid per share $ 0.04 $ 0.04 $ 0.04 $ 0.04
--------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS
Information was mailed to holders of Shares during the third quarter
of 1996 regarding a potential sale of the entire assets of the Trust. This
sale was consummated on October 1, 1996, when the Trust sold all of its real
estate holdings, mortgage notes receivable and personal property for
$4,050,000. The Trust will recognize a gain of approximately $1,500,000 for
financial reporting purposes and approximately $1,450,000 for income tax
purposes. As of the date of this Proxy Statement, the only assets retained by
the Trust are cash, rent receivables, and a small amount of prepaid expenses.
Actions are currently being taken to collect these outstanding rent
receivables.
Rental income decreased by approximately 6% during the nine-month
period ended September 30, 1996, as compared to the nine-month period ended
September 30, 1995. Rental income also decreased by approximately 3% during
the three-month period ended September 30, 1996, as compared to the three
month period ended September 30, 1995. This decrease is primarily due to the
sale of several pieces of rental property in the latter part of 1995, and due
to the financial problems encountered by a major tenant. The Trust was able to
partially offset these decreases in rental income by securing a tenant for a
previously unoccupied location.
Total expenses increased by approximately 15% during the three-month
period ending September 30, 1996, as compared to the three-month period ended
September 30, 1995. In addition, total expenses increased by approximately 4%
during the nine-month period ended September 30, 1996, as compared to the
nine-month period ended September 30, 1995. These increases are primarily due
to an increase in the bad debts expense recorded during the third quarter of
1996. Due to the sale of all rental property, management anticipates increased
difficulties in collecting back due rent from former tenants. Therefore, a
larger percentage of the rents receivable at September 30, 1996 have been
considered uncollectible, which has resulted in a much larger than normal bad
debt expense for the third quarter of 1996.
In January of 1996, the Trust sold the St. Stephen Post Office located
in St. Stephen, South Carolina for $70,000. A first quarter gain of $55,485
and $53,566 was recognized for financial reporting and income tax purposes,
respectively.
SHAREHOLDER PROPOSALS
Once the Trust is dissolved, there will be no shareholders' meetings
thereafter. Therefore, no proposals by holders of Shares will be considered
unless a properly called special meeting of holders is convened expressly for
such purpose prior to the liquidation.
ADDITIONAL INFORMATION
Because the Trust has fewer than 500 shareholders and has had less
than $5 million in assets at the end of each of the last three fiscal years,
the Trust is no longer required to file reports under Sections 13(a) and 15(d)
of the Exchange Act. On November 6, 1996, the Trust filed a Form 15
"Certification and Notice of Termination of Registration under Section 12(g) of
the Securities Exchange Act of 1934 or Suspension of Duty to File Reports"
with the Commission. As a result, the Trust has no obligation to file any
additional reports pursuant to Sections 13(a) or 15(d) of the Exchange Act
after the date of such filing. Any filing made by the Trust pursuant to
Section 13(c) or Section 14 of the Exchange Act filed after the date hereof and
prior to the Special Meeting shall be deemed to be incorporated by reference in
this Proxy Statement and to be a part hereof from the respective dates of
filing of such documents. Any statement contained herein or in a document
incorporated herein shall be deemed to be modified or superseded for purposes
of this Proxy Statement to the extent that a statement contained herein or in
any other subsequently-filed document which also is incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Proxy Statement.
<PAGE> 13
OTHER MATTERS
Under South Carolina law, only those matters described in the meeting
notice may be considered at the Special Meeting or any adjournment or
postponement thereof. The Trustees are not aware of any procedural matter to be
brought before the Special Meeting. If such procedural matters are duly
presented for action, it is the intention of the persons named in the enclosed
proxy to vote on such matters in accordance with their judgment.
By order of the Board of Trustees,
Stewart H. Garrett
Secretary
November 25, 1996
Fountain Inn, South Carolina
<PAGE> 14
APPENDIX A
PLAN OF COMPLETE LIQUIDATION
1. Scope of Plan.
This Plan of Complete Liquidation (the "Plan") provides for the
complete liquidation and dissolution of Real Estate Fund Investment Trust, a
South Carolina trust ("REFIT"), by providing for the distribution to its
shareholders of the net proceeds (after payment of liabilities and expenses)
realized from the sale of its assets. The liquidation and dissolution shall be
accomplished in the manner stated herein. This Plan may be amended upon the
approval of the majority of the Trustees then alive.
2. Adoption of Plan by Shareholders.
This Plan shall be adopted and shall become effective (the "Closing"),
subject to the conditions provided herein, upon the approval of this Plan by
the Trustees and upon the affirmative vote of the holders of shares entitling
them to exercise at least a majority of the voting power of REFIT at a special
meeting of shareholders held for such purpose.
3. Sale of Assets.
On October 1, 1996, REFIT sold all of its assets to Younts Properties,
Inc., a South Carolina corporation ("YPI"), for $4.05 million in cash, paid by
YPI to REFIT subject to the terms and conditions of the Sales Agreement between
REFIT and YPI (the "Sales Agreement") heretofore approved by the Trustees of
REFIT. Any remaining non-cash assets will be sold by the Trustees and the
proceeds will be distributed to former holders of shares as part of the Second
Liquidating Distribution (as defined below) as provided herein.
4. Reserve for Liabilities.
From and after the date hereof, REFIT shall make adequate provision
for payment of all known liabilities of REFIT (including expenses of the sale
and the liquidation and dissolution) not assumed by YPI and shall set aside
from the proceeds of sale such additional amount as the Trustees determine to
be reasonably necessary for payment of unascertained or contingent liabilities
of REFIT. The balance of the proceeds of sale shall be distributed to the
shareholders of REFIT, in cash, as a first liquidating distribution in complete
cancellation of REFIT's outstanding shares, all as more particularly set forth
in Section 6 below (the "First Liquidating Distribution").
5. Independent Agent
REFIT shall engage an independent certified public accountant (the
"Independent Agent") who shall be responsible for overseeing the liquidation
process, including but not limited to the distributions to shareholders.
6. First Liquidating Distribution.
The First Liquidating Distribution shall be made to shareholders by
REFIT. As soon as practicable after the date hereof, and in no event later than
December 31, 1996, REFIT, as instructed by the Independent Agent, shall send
notice to the holders of Shares notifying them of the liquidation and
instructing them to return to a special post office box established by the Trust
for purposes of the liquidation their REFIT share certificates, together with
any other documents that the Trustees or Independent Agent may require,
whereupon such shareholders' pro rata share of the First Liquidating
Distribution hereunder shall be sent to them based on their shares surrendered.
No funds shall be paid to the REFIT shareholders except upon receipt by REFIT of
the surrendered share certificates, or evidence reasonably satisfactory to the
Independent Agent that such certificates have been lost or destroyed. The First
Liquidating Distribution shall be an aggregate of $3,735,000, which represents
ninety percent (90%) of the funds received by REFIT from YPI and REFIT's cash on
hand. REFIT's share transfer books shall be closed as of the Closing.
<PAGE> 15
7. Payment of Liabilities.
REFIT shall pay any known liabilities as promptly as practicable after
the Closing and shall pay any expenses of REFIT or unknown liabilities that
arise after the Closing as promptly as practicable after such expenses or
unknown liabilities arise. After the date of the Second Liquidating
Distribution (as defined below), REFIT will not have any funds with which to
pay any liabilities arising thereafter.
8. Second Liquidating Distribution.
As soon as practicable after December 9, 1997, but in any event no
later than December 31, 1997 (unless such date is postponed by vote of a
majority of the Trustees then alive), the Independent Agent shall instruct
REFIT to send to all former shareholders of REFIT who received a notice of the
First Liquidating Distribution, a second liquidating distribution (or in the
case of former shareholders of REFIT who have not surrendered their REFIT share
certificates, notice of such second liquidating distribution) consisting of all
remaining funds (if any) of REFIT held by it for the purposes of paying known
or unknown liabilities (the "Second Liquidating Distribution").
9. Unlocated Shareholders.
Any assets retained by REFIT for distribution to shareholders who
cannot be located after reasonable efforts shall be transferred to a state
official, trustee, or other person authorized by law to receive distributions
for the benefit of such shareholders, in such manner as may be determined by the
Trustees. Such assets shall thereafter be held by such official on the same
terms and in accordance with the usual treatment accorded such funds under state
law. In no event shall any of such assets revert to or become the property of
REFIT.
10. Dissolution.
Promptly after the Closing, REFIT shall (a) cause an amendment to its
Declaration of Trust to be prepared and executed, and, if required by
applicable law, filed in the Office of the Secretary of State of South Carolina
or with any other appropriate governmental authority; (b) cause any certificate
of dissolution as may be necessary or appropriate to be prepared, executed, and
filed, if necessary in the Office of the Secretary of State of South Carolina
or with any other appropriate governmental authority; and (c) withdraw its
authority to do business as a foreign corporation or entity in any states in
which it presently has such authority.
11. Abandonment.
Notwithstanding the adoption of this Plan, if the sale of assets to
YPI as provided in the Sales Agreement is rescinded or is otherwise void, the
Trustees shall, without further action by the shareholders, abandon this Plan
and cause REFIT to continue the active conduct of its business.
<PAGE> 16
APPENDIX B - FORM OF PROXY
<PAGE> 17
P
R
O REAL ESTATE FUND INVESTMENT TRUST
X SPECIAL MEETING, DECEMBER 9, 1996
Y
The undersigned shareholder of Real Estate Fund Investment Trust (the
"Trust"), hereby revoking all previous proxies, hereby appoints George B.
Nalley, President; Stewart H. Garrett, Secretary and Treasurer; and Blake P.
Garrett, Jr., Vice President; and each of them, the attorneys of the
undersigned, with power of substitution, to vote all stock of the Trust
standing in the name of the undersigned upon all matters at the Trust's Special
Meeting to be held at the Days Inn, I-385 and Frontage Road, Simpsonville,
South Carolina on Monday, December 9, 1996 at 11:30 a.m. and at any
adjournments thereof, with all powers the undersigned would possess if
personally present, and without limiting the general authorization and power
hereby given, directs said attorneys or either of them to cast the
undersigned's vote as specified below.
1. APPROVAL OF PLAN OF COMPLETE LIQUIDATION
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. AT THEIR DISCRETION UPON SUCH PROCEDURAL MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF REAL ESTATE FUND
INVESTMENT TRUST. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR
APPROVAL OF EACH OF THE PROPOSALS ABOVE.
Please sign this Proxy as your name or names appear hereon. If stock is held
jointly, signature should appear for both names. When signing as attorney,
administrator, trustee, guardian or agent, please indicate the capacity in
which you are acting. If stock is held by a corporation, please sign in full
corporate name by authorized officer and give title of office.
Dated this day of , 1996
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Print Name (and title if appropriate)
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Signature
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Print Name (and title if appropriate)
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Signature
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
