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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
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Date of Report June 9, 1998
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First Union Real Estate Equity and Mortgage Investments
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(Exact name of registrant as specified in its charter)
Ohio 1-6249 34-6513657
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State or other jurisdiction (Commission File Number) (I.R.S. Employer
Identification No.)
Suite 1900, 55 Public Square
Cleveland, Ohio 44113-1937
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 781-4030
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Former name or former address, if changed since last report.
Total number of pages in report 3.
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ITEM 1. CHANGE IN CONTROL OF REGISTRANT
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On May 19, 1998, the Registrant held a Special Meeting of Beneficiaries
(the "Meeting"), called to vote on certain proposals and nominations made by the
Board of Trustees of the Registrant (the "Board") and certain proposals and
nominations made by Gotham Partners, L.P. ("Gotham"). The Board's proposal was
to fix the size of the Board at twelve by adding three new seats, with one
vacancy to be added to each of the existing classes of Trustees. The Board's
nominations were for election of three Trustees to Class II of the Board, whose
terms were expiring at the Meeting. Prior to the vote, the Board withdrew the
nominations of two of the candidates. Gotham's proposal was to fix the size of
the Board at fifteen by adding two seats to each of the existing classes of
Trustees, and to immediately fill such newly created seats. Gotham's nominations
were for election of three Trustees to Class II of the Board and election of two
additional Trustees to each of the three classes of the Board, to fill the
newly- created seats if Gotham's proposal was adopted.
On May 26, 1998, the Inspector of Elections for the Meeting certified
that the vote of beneficiaries resulted in the adoption of Gotham's proposal and
the election of all of Gotham's nominees. Gotham's nominees elected as Trustees
are as follows: William A. Ackman, David P. Berkowitz, James A. Williams, Mary
Ann Tighe and Stephen J. Garchik to Class II; Daniel Shuchman and Stephen S.
Snider to Class I; and David S. Klafter and Daniel J. Altobello to Class III. On
June 3, 1998, Gotham's nominees became members of the Board and James M.
Delaney, Kenneth K. Chalmers and Spencer H. Heine resigned from the Board.
Gotham, Gotham Partners II, L.P. ("Gotham II") and Gotham International
Advisors, L.L.C. ("Gotham Advisors") beneficially own 8.23%, 0.10% and 1.31%,
respectively, of the Registrant's outstanding shares of Beneficial Interest, par
value $1.00 per share (the "Shares"). Mr. Ackman is President of Karenina
Corporation, a general partner of Section H Partners, L.P. ("Section H"), the
sole general partner of Gotham and Gotham II, and a Senior Managing Member of
Gotham Advisors. Mr. Berkowitz is President of DPB Corporation, a general
partner of Section H, and a Senior Managing Member of Gotham Advisors. Mr.
Klafter and Mr. Shuchman are each limited partners of Section H and Gotham, and
Members of Gotham Advisors. Ms. Tighe and Mr. Williams are each limited partners
of Gotham. Each of the foregoing individuals has disclaimed beneficial ownership
of any Shares beneficially owned by Gotham, Gotham II or Gotham Advisors.
ITEM 7. EXHIBITS.
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99.1 Press Release dated May 26, 1998 announcing results
of voting
99.2 Press Release dated May 28, 1998 announcing a change
in control
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
First Union Real Estate Equity
and Mortgage Investments
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(Registrant)
Date: June 9, 1998 By: /S/ Paul F. Levin
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Paul F. Levin
Senior Vice President
Secretary and General Counsel
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Exhibit 99.1
FIRST UNION REAL ESTATE INVESTMENTS
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AT THE COMPANY IN CLEVELAND, OHIO
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Thomas T. Kmiecik Patrick Gallagher
Senior Vice President and Treasurer Edward Howard & Co.
(216) 781-4030 (216) 781-2400
FOR IMMEDIATE RELEASE
FIRST UNION ANNOUNCES RESULTS OF VOTING ON PROXY ISSUES
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CLEVELAND, OHIO, MAY 26, 1998 -- FIRST UNION REAL ESTATE INVESTMENTS (NYSE:FUR)
today announced that certified results indicate that beneficiaries of the Trust
have voted in favor of proposals by Gotham Partners, L.P. by a margin of more
than three to one. Gotham had proposed to expand the Board of Trustees by six,
from nine to 15 seats. Gotham also had submitted nine nominees to fill the six
new seats plus the three Class II seats that were up for election. Beneficiaries
elected the following Gotham nominees to the Board of Trustees:
William A. Ackman, principal, Gotham Partners Management Co., LLC,
New York, an investment management firm;
Daniel J. Altobello, chairman of the board, ONEX Food Services, Inc.,
Bethesda, Maryland;
David P. Berkowitz, principal, Gotham Partners Management Co., LLC;
Stephen J. Garchick, president, The Evans Company, McLean, Virginia,
a commercial real estate development and management firm;
David S. Klafter, in-house counsel and principal, Gotham Partners
Management Co., LLC;
Daniel Shuchman, principal, Gotham Partners Management Co., LLC;
Stephen S. Snider, senior partner, Hale and Dorr LLP, Washington, D.C.,
a law firm;
Mary Ann Tighe, executive managing director, Insignia/ESG, New York, a
commercial real estate firm;
James A. Williams, president, Williams, Williams, Ruby & Plunkett PC,
Birmingham, Michigan, a law firm, and chairman, Michigan National Bank
and Michigan National Corp.
First Union Real Estate Investments is a real estate investment trust (REIT)
headquartered in Cleveland, Ohio, and traded on the New York Stock Exchange.
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Exhibit 99.2
FIRST UNION REAL ESTATE INVESTMENTS
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AT THE COMPANY
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Thomas T. Kmiecik
Senior Vice President and Treasurer
(216) 781-4030
FOR IMMEDIATE RELEASE
FIRST UNION ANNOUNCES CHANGE IN CONTROL
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CLEVELAND, OHIO, MAY 28, 1998 - FIRST UNION REAL ESTATE INVESTMENTS (NYSE:FUR)
today announced that as a result of the certification of the vote of the Trust's
1998 annual meeting, a change in control of the company has officially occurred.
The certified results indicated that beneficiaries of the Trust have voted in
favor of proposals by Gotham Partners, L.P., by a margin of more than three to
one. Gotham also had submitted nine nominees to fill the six new seats plus the
three Class II seats that were up for election.
In its proxy statement, Gotham had urged the existing Trustees to approve the
Gotham nominees or their election. Such an action would have resulted in
avoidance of a technical change in control. The existing Trustees declined to do
so, and consequently, the certification of the vote results in a change of
control.
The change in control gives certain lenders and other parties the right, at
their option, to accelerate repayment of obligations in excess of $120 million,
including the Trust's revolving credit agreement and an obligation associated
with the acquisition of Imperial Parking Limited. Furthermore, the right to
accelerate will be extended to include the Trust's 8 7/8% Senior Notes and other
debt instruments if other subsequent events occur, including a debt rating
downgrade.
Under the Trust's 1994 Incentive Plan, the change in control causes the vesting
of certain stock options and the lifting of restriction on past stock awards. It
also triggers change-in-control provisions under certain employment agreements.
Steven M. Edelman, interim chief executive officer, commented, "This event has
been anticipated and we have scheduled meetings with all appropriate parties to
review the current situation. New members of First Union's Board of Trustees,
including Bill Ackman, will be directly involved in these discussions. We
believe that once the lenders understand First Union's new strategic direction
and near-term plans no acceleration of any significant obligations will occur."
First Union Real Estate Investments is a real estate investment trust (REIT)
headquartered in Cleveland, Ohio, and traded on the New York Stock Exchange.
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