<PAGE>
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 (S) 240.14a-11(c) or (S) 240.14a-12
Columbia Real Estate Investments, Inc.
- -----------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*/
-
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4) Proposed maximum aggregate value of transaction:
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*/ Set forth the amount on which the filing fee is calculated and state how it
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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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
Preliminary Copy
COLUMBIA REAL ESTATE INVESTMENTS, INC.
10440 Little Patuxent Parkway
Columbia, Maryland 21044
__________________
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH [15], 1994
TO THE STOCKHOLDERS OF COLUMBIA REAL ESTATE INVESTMENTS, INC.:
Notice is hereby given that a special meeting of stockholders of
Columbia Real Estate Investments, Inc. (the "Company") will be held at the
_____________________________ on March [15], 1994 at [11:30 A.M.] for the
following purpose:
To consider a proposal to adopt a plan of dissolution and liquidation.
By resolution of the Board of Directors, the close of business on January
17, 1994 has been fixed as the record date for the determination of stockholders
entitled to notice of, and to vote at, such meeting and any adjournment thereof.
The stock transfer books will not be closed.
By order of the Board of Directors,
THOMAS F. IRETON
Secretary
January 28, 1994
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING IN PERSON OR
BY PROXY. IF YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE SIGN, DATE
AND RETURN THE ENCLOSED PROXY PROMPTLY. THE ENVELOPE FURNISHED NEEDS NO
POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
COLUMBIA REAL ESTATE INVESTMENTS, INC.
10440 Little Patuxent Parkway
Columbia, Maryland 21044
___________________
COLUMBIA REAL ESTATE INVESTMENTS, INC.
PROXY STATEMENT
This Proxy Statement is furnished to the holders of the shares of common
stock, par value $.01 per share (the "Common Stock"), of Columbia Real Estate
Investments, Inc. (hereinafter referred to as the "Company") in connection with
the solicitation of proxies for use at the Special Meeting of Stockholders of
the Company to be held at the time and place and for the purpose set forth in
the foregoing Notice of Special Meeting.
Your proxy is solicited by the management of the Company. The proxy,
once given, may be revoked by letter to the Secretary of the Company received
before the meeting, or by utilizing a ballot at the meeting.
The cost of soliciting proxies, including the cost of preparing and
mailing the proxy material, will be borne by the Company. The solicitation will
be made primarily by mail and may be made by the directors, officers and
employees of the Company, personally or by mail, telegraph or telephone.
Solicitation of proxies may also be made on behalf of the Board of Directors by
Corporate Investor Communications at an estimated cost, including fees and
expenses, of approximately $7,500. Brokers, custodians and other like parties
will be requested to send proxy materials to beneficial owners of Common Stock,
and the Company will defray reasonable expenses incurred in forwarding such
material.
On January 17, 1994, the outstanding stock of the Company entitled to
vote consisted of ____________ shares of Common Stock. Each share is entitled
to one vote.
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table and notes thereto set forth information, as of
January 17, 1994, with respect to the beneficial ownership of shares of Common
Stock by each Director and the Directors and Executive Officers as a group,
based upon information furnished to the Company by such persons. (The executive
officers of the Company, other than the Chief Executive Officer of the Company,
Mr. Gallitano, are not included individually because they receive no
compensation from the Company.) Except as otherwise indicated by footnote to
the table, each person included in the table exercises sole voting and
dispositive power over such shares. As of January 17, 1994, management of the
Company knew of no person
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<PAGE>
who beneficially owned more than 5 percent of the outstanding shares of Common
Stock of the Company.
<TABLE>
<CAPTION>
Shares of Common
Name of Beneficial Owner Stock Beneficially Owned
- ------------------------ ------------------------
<S> <C>
David J. Gallitano [13,400] *
George W. Gowen [5,000] *
Ronald F. Poe (1) [8,752] *
Walter F. Terry, III [6,171] *
All Directors and Executive Officers [35,583] *
</TABLE>
___________________________________
* Approximately 1% of the Company's shares.
(1) Mr. Poe disclaims beneficial ownership of 4,000 shares of Common Stock
included in the table which are held in his spouse's name.
PROPOSAL TO DISSOLVE THE COMPANY
On December 7, 1993, the Company's Board of Directors approved a
resolution declaring that the dissolution of the Company was advisable and
determining to recommend to the Company's stockholders that the Company be
dissolved. In connection with the dissolution of the Company, the Company will
sell or otherwise dispose of its subsidiaries, PaineWebber Mortgage Obligations,
Inc. ("PWMO") and R D Financial Corp. II ("RD"). As of December 6, 1993, the
day before the Company announced the decision by the Board of Directors, the low
and high sale prices of the Common Stock on the American Stock Exchange were
$8.125 and $8.25, respectively.
The Board's decision to recommend the dissolution of the Company was
made after considering various strategic alternatives available to the Company.
As discussed more fully below, the Board concluded that dissolution would be
more likely to provide the Company's stockholders with a greater return on their
investment than they would receive either through the continuation of the
Company's current investment policies, or by the adoption of one of various
different strategic alternatives considered by the Board.
The Company's business purpose is to invest in fixed-rate, long-term
mortgage loans secured by single-family residential properties and in residual
interests in other mortgage derivative investments. The Company and its
subsidiaries are taxed as real estate investment trusts ("REITs" ) pursuant to
the Internal Revenue Code (the "Code"). As a result, with limited exceptions,
the Company and its subsidiaries are not taxed at the corporate level on net
income distributed to shareholders. The dividends paid with respect to the
shares of Common Stock are taxable as
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<PAGE>
ordinary income to the stockholders to the extent of the Company's accumulated
and current earnings and profits. Special rules apply in the case of capital
gain dividends.
At the time of the Company's first public offering of shares of Common
Stock in 1986, the Company's business strategy was to pledge mortgage loans to
support the periodic issuance of collateralized mortgage obligations ("CMOs"),
and possibly other types of mortgage-backed securities, with respect to which
the Company would retain high yielding residual interests. The proceeds from
the issuance of the CMOs and other mortgage-backed securities were to be used to
invest in new mortgage loans. PWMO was formed in 1986 to facilitate the
issuance of CMOs. In addition, the Company expected to purchase equity
interests or shares of Beneficial Interest in one or more entities established
to issue CMOs. In 1987, the Board of Directors modified the Company's
investment policies to permit investment in other types of mortgage derivatives,
such as residual interests in real estate mortgage investment conduits or
"REMICs." During 1988, the Board changed its business strategy to decrease the
emphasis on acquiring mortgage loans for the purpose of issuing CMOs and instead
to focus on other investment alternatives. This decision was made so as to
reduce the risk from interest rate increases as mortgages were being acquired to
support the CMOs. The changed focus led to the Company's acquisition of CMO
residuals owned by other issuers in 1988 and the acquisition of RD, an entity
owning CMOs, in 1989.
ALTERNATIVES CONSIDERED BY THE BOARD
Under the Company's current strategy of investing in residential
mortgages through the purchase of whole loans, mortgage-backed securities or
other forms of mortgage derivatives, the Company has encountered a shrinking
asset base due to (i) high prepayment rates from the record number of
refinancings and (ii) the lack of available high yielding investments.
As a result, the Company has considered four strategic options for its
operations. These options, which are discussed below, are to (1) continue the
current strategy, (2) raise additional equity and move into different business
lines, (3) merge with another entity or (4) liquidate the Company.
Current Strategy. The Company believes that the current strategy is not a
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viable option due to a reduction in available investment alternatives having
attractive yields. Possible investment alternatives do not provide the yields
that were available on residuals when the Company's business strategy was
developed. Currently available single-family mortgage and derivative products
are not acceptable investments because of low interest rates on such products.
Further, the widespread demand for
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<PAGE>
REMICs and other residuals has greatly reduced the returns on those investments.
The Company cannot acquire significantly more of its shares of Common
Stock. For a number of years the Company has repurchased outstanding shares of
Common Stock because of its view that the Common Stock represented a good
investment. As of December 7, 1993, the date the Company ceased repurchasing
its shares, the Company had reacquired 2,356,206 shares of Common Stock at an
aggregate cost of $18,813,919 or $7.66 per share. This amount constitutes an
aggregate of 40.55% of the shares of Common Stock originally issued by the
Company in 1985 and 1986, a level slightly below the 45% level that the Board
had authorized.
As a result of the high levels of prepayments of mortgages over the last
few years, the assets that the Company now owns have lower yields than those it
owned before interests rates began to fall in late 1990. In addition, the
amount of such assets is lower. Therefore, the Company expects that its
earnings in 1994 will be lower if it is not dissolved. The lower earnings will
result in lower dividends, which cannot be minimized through significantly more
repurchases of the Common Stock because such repurchases would reduce the
liquidity of the shares.
From 1987 through 1991, the Company paid annual dividends in amounts
between $.88 and $.97 per share. In 1992 and 1993, the Company paid dividends
in the amount of $.80 and $.76 per share, respectively. Under the current
strategy, primarily as a result of the spread between interest to be earned on
assets and interest to be paid on liabilities, the Company expects that 1994
taxable income will decrease, thereby requiring the Company to reduce dividends
to significantly below the 1993 level of dividends paid.
Even if interest rate increases in the future lead to higher yielding
available investments, the Board does not expect such investments to have the
yields that residuals, REMICs and other derivative products had during the 1980s
when those products were in their infancy and were purchased by a much smaller
number of buyers than are willing to buy them now. Accordingly, the Company
would not be able to pursue its original business strategy of acquiring
unusually high yielding, but relatively low risk, investments.
Raise Additional Equity. The Company does not believe it would be able to sell
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equity. The Company is not aware of any initial public offering during the last
three years by a REIT that invests in mortgages. Even if the Company could sell
its equity, it probably would have to change its strategic direction for such an
offering to succeed.
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<PAGE>
Although most of the REITs that sold equity during 1993 invested in
property, such as shopping centers, nursing homes, fast food partnerships,
mobile home sites and hotels, the Company does not believe that it should begin
investing in property because it does not have the management experience with
such investments. Even if the Company changed its business strategy to begin
investing in property, implementation of such a strategy would take some time
before the Company could market its shares as those to be issued by a property
REIT. Further, the Board believes that the pricing of the underlying properties
of REITs that invest in property in some instances may be high relative to the
underlying value, resulting in concerns about the ability of such REITs to meet
expectations.
The Board considered whether it might be able to implement other types
of changes to its business strategy if it found that there was no demand for its
shares. Among the alternatives the Board considered were the readoption of the
Company's initial strategy of purchasing whole loans and issuing CMOs or
investment in other types of products not currently approved by the Company's
By-Laws.
The Board does not recommend the readoption of the initial strategy. As
noted above, that strategy was based upon the much higher yields on the
residuals of CMOs than exist currently. In addition, the long time periods
required to accumulate the mortgages to support the CMOs might result in a risk
from interest rate changes pending the issuance of the CMOs.
Among the alternative investment options considered by the Board but not
presently permitted by the Company's ByLaws were the acquisition of junior
positions (subordinated "B" pieces) on commercial mortgage-backed securities,
often on single properties, and the acquisition of tranches of commercial CMO
deals. The Board rejected each of these options because of the higher level of
risk that is not outweighed by the yields on such investments.
Merger Strategy. The Board believes that a merger in which the Company's
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stockholders were to receive stock of another company is not viable because it
would require the Company's stockholders to accept the acquiror's investment
strategy, which might be a strategy in which the Company's Board does not
believe. A merger or other affiliation where the Company or its stockholders
received cash would be wholly consistent with the Board's recommendation that
the Company be dissolved, and could be accomplished if the stockholders approve
the dissolution of the Company., as discussed below.
Liquidation. The Board believes that the stockholders will be more likely to
- -----------
realize any additional value of the Company in excess of the actual market price
of the Common Stock through the
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<PAGE>
liquidation of the Company's assets than through any of the other alternatives
considered. In order to minimize any adverse affects on the value of the
Company's assets from any increase in interest rates in the future, the Board
approved the liquidation of the Company at its December 7, 1993 meeting and
selected a date as soon thereafter as possible for the Special Meeting of
Stockholders to consider a Plan of Dissolution and Liquidation ("Plan").
If the stockholders approve the liquidation of the Company, the assets
of the Company will be sold. The proceeds from the sale of the assets will be
used first to repay the Company's liabilities, which were $78,306,000 as of
October 31, 1993, and, thereafter, any remaining proceeds after payment of all
costs incurred throughout the liquidation process (including the fees paid to
the company's advisor, Columbia National, Incorporated ("CNI"), which will sell
the Company's assets under its existing operating agreement with the Company)
will be distributed to the stockholders.
At this time the Board of Directors cannot estimate the amount of
proceeds that will be available for distribution to stockholders. Consistent
with its recent past practice, however, the Board has estimated the market value
of the Company based upon an item by item analysis of the Company's balance
sheet as of October 31, 1993. As was emphasized in the Company's Annual Report
for 1991, where a market valuation was first disclosed, such an estimate is
somewhat volatile and always changing. The determination of market values is,
by necessity, subjective. The valuation of certain items on the balance sheet
is relatively easy since they are very liquid (for example, cash, mortgages and
accrued interest receivable/payable) but other items, such as residuals, are
much more thinly traded and have no published or readily available quotations.
"Market" value for the residuals are thus estimated using the best assumptions
of interest rates, prepayments and discount rates available at the time.
Although the Board believes this methodology calculates fairly the value as of
the determination date, the Company's market value can change dramatically from
one day to the next because of the volatile nature of interest rate markets and
the illiquidity of some of the Company's investments. As of October 31, 1993,
the Board has estimated the value of the Company's assets to be $9.22 per share.
SELECTED FINANCIAL AND OTHER DATA
The table set forth below includes selected consolidated financial data
for the Company and its subsidiaries as of and for the five years ended December
31, 1992 and the nine months ended September 30, 1992 and 1993.
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<PAGE>
<TABLE>
<CAPTION>
As of or for the
Nine Months Ended Fiscal Years Ended December 31,
OPERATING RESULTS 9/30/93 9/30/92 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C>
Total revenues $ 10,380,243 $ 18,756,396 $ 23,553,144 $ 33,937,902 $ 38,813,841 $ 41,677,776 $ 30,465,439
Total expenses 8,666,623 17,392,203 21,072,489 29,565,022 34,009,160 36,684,467 25,019,753
Net earnings $ 1,713,620 $ 1,364,193 $ 2,480,655 $ 4,372,880 $ 4,804,681 $ 4,993,309 $ 5,445,686
============ ============ ============ ============ ============ ============ ============
Net earnings per
share $.43 $.30 $.56 $.92 $.92 $.91 $.92
==== ==== ==== ==== ==== ==== ====
Cash dividends per
share $.57 $.61 $.80 $.92 $.92 $.90 $.88
==== ==== ==== ==== ==== ==== ====
SELECTED BALANCE SHEET
DATA
Total assets $143,368,919 $220,388,730 $186,017,435 $320,707,992 $378,612,982 $422,773,749 $309,246,264
Bonds payable, net 48,214,377 128,797,083 109,078,035 244,137,857 297,810,443 341,570,596 228,388,635
Shareholders' equity 36,331,213 40,875,392 40,111,335 45,207,950 48,408,985 50,193,840 52,571,643
OTHER
Book value per
share $9.66 $9.52 $9.67 $9.70 $9.56 $9.44 $9.30
Market price per
share $8.25 $7.70 $7.75 $8.125 $7.125 $6.875 $6.625
Average yield on
investments on
mortgage loans 9.91% 9.76% 9.85% 9.90% 9.97% 10.07% 9.55%
Average yield on
residuals 3.79% .79% .64% 6.27% 12.11% 15.56% 10.30%
Average cost of
funds on bonds 10.15% 9.81% 9.80% 9.71% 9.71% 9.80% 9.00%
Average cost of
funds on short term
borrowings 3.62% 4.26% 4.21% 6.49% 8.41% 9.57% 7.98%
</TABLE>
Proposed Stockholder Action
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<PAGE>
At the Special Meeting, the Company's stockholders will be asked to vote on a
proposal to adopt a Plan of Dissolution and Liquidation (the "Plan"), pursuant
to which the Company, without further action by the stockholders (except as such
action may be required by law or as the Board of Directors may deem
appropriate), will be dissolved and liquidated after payment of, or provision
for the payment of, accrued and contingent liabilities, claims and liquidation
expenses of the Company and its subsidiaries. Any remaining assets would be
distributed to the stockholders.
THE TEXT OF THE PLAN IS CONTAINED IN APPENDIX A ATTACHED HERETO. THE BRIEF
----------
DESCRIPTION OF THE PLAN SET FORTH HEREIN AND IN THE SUMMARY OF THE MATERIAL
TERMS OF THE PLAN UNDER "PLAN OF DISSOLUTION AND LIQUIDATION" IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO THE PLAN.
PLAN OF DISSOLUTION AND LIQUIDATION
The Plan provides for the dissolution of the Company pursuant to the
provisions of the Maryland General Corporation Law (the "Maryland Law"). Upon
the approval of the Plan by two-thirds of all of the votes entitled to be cast,
the Plan will become effective and the Company will be required to mail notices
to its creditors and its employees advising them that the stockholders have
approved the voluntary dissolution of the Company. Not less than 20 days after
giving the notice to creditors, the Company will file Articles of Dissolution
with the Maryland State Department of Assessments and Taxation (the "Maryland
Department"). At any time before the Articles of Dissolution are accepted for
record by the Maryland Department, the Board of Directors will be able to
abandon the dissolution of the Company if the Board deems such action to be in
the best interests of the Company and the holders of two thirds of the Company's
stockholders approve the abandonment.
Subsequent to the effective date of the Plan, the Company will begin selling
its assets. The Company's advisor, CNI, will sell the Company's assets under
its existing operating agreement with the Company. The Board may appoint a
committee to oversee the liquidation process. From time to time, the Board may
pay liquidating dividends to stockholders on a record date set by the Board.
It is anticipated that some or all of the present Directors and officers of
the Company will continue to serve in such capacities following adoption of the
Plan. Such Directors remaining in office will continue to receive directors
fees.
Once the Maryland Department accepts the Company's Articles of Dissolution for
record, the Company will be considered to be dissolved. The Company's directors
will serve as trustees of the
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<PAGE>
Company's assets for purposes of any further liquidation unless a court appoints
a receiver. The existence of the Company will continue under the direction of
the directors or such a receiver for the purpose of paying, satisfying and
discharging any existing debts or obligations of the Company, collecting and
distributing its assets and doing all other acts required to liquidate and wind
up its business and affairs.
The stock transfer books of the Company will be closed as of the close of
business on the date the Maryland Department accepts the Company's Articles of
Dissolution. Thereafter, no assignments or transfers of Common Stock (except
for those occurring by will, intestate succession or operation of law) will be
recorded.
VOTE REQUIRED
Under Maryland Law, adoption of the Plan will require the favorable vote of
the holders of two thirds of the outstanding shares of Common Stock of the
Company. Each of the members of the Board of Directors is recommending approval
of the Plan. As of January 17, 1994, the members of the Board and the officers
of the Company owned an aggregate of approximately 1% of the Common Stock of the
Company.
DISSENTERS' RIGHTS
If the Plan is approved and the Company is dissolved, the stockholders of the
Company will have no dissenters' or other similar rights under Maryland Law.
CERTAIN REGULATORY MATTERS
The Company is not aware of any federal or state regulatory requirements or
approvals required to complete the dissolution other than the provisions of
Maryland Law described above.
FEDERAL INCOME TAX CONSEQUENCES OF DISSOLUTION
The Company qualifies as a REIT under the provisions of the Internal Revenue
Code and intends to remain so qualified through the period of its dissolution.
Accordingly, the Company, in computing its taxable income, generally may deduct
the amount of the dividends it pays to its stockholders for purposes of
determining its income tax liability, if any. For such purposes, the Company
will take into account for its taxable year in which it liquidates both its
items of income and expense from operations and its gains and losses from the
sale of its assets as well as the amount of its dividends. If the Company
distributes to the stockholders amounts equal to its net income, it should not
be subject to Federal income tax unless the Company has incurred income from
"foreclosure property" (which is, in
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<PAGE>
general, property acquired by foreclosure on a loan secured by the property) or
has income from prohibited transactions (which is, in general, income from sales
of property held for sale to customers in the ordinary course of business).
The stockholders generally treat a nonliquidating dividend from the Company
(other than a capital gain dividend) as ordinary income to the extent of the
Company's accumulated and current earnings and profits. A capital gain dividend
would be treated by the stockholders as gain from the sale or exchange of a
capital asset held for more than one year. If, however, the dividend is
properly treated as a liquidating dividend, the stockholders should treat the
distribution as an amount received in full payment in exchange for their stock.
Gain or loss would be recognized by a stockholder measured by the difference
between (i) the amount of money and fair market value of other property received
and (ii) the basis in the Company's shares. Generally, a dividend distribution
that is part of the liquidation process is treated as a liquidation dividend.
This process generally is present when the corporation ceases to be a going
concern and its activities are merely for the purpose of winding up its affairs,
paying its debts, and distributing any remaining balance to its shareholders.
Generally, a dividend distribution that occurs before the liquidation process
has commenced will not be treated as a liquidating dividend.
DUE TO THE COMPLEXITIES OF THE FEDERAL AND STATE INCOME TAX LAWS, IT IS
RECOMMENDED THAT STOCKHOLDERS CONSULT WITH THEIR OWN TAX ADVISORS CONCERNING THE
INCOME TAX CONSEQUENCES OF THE DISSOLUTION.
------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PLAN OF
DISSOLUTION AND LIQUIDATION.
Stockholder Proposal Requirements
If the Plan of Dissolution and Liquidation is not approved by the stockholders
and if a stockholder desires to have a proposal formally considered at the 1994
annual meeting of stockholders, and included in the proxy statement for that
meeting, the proposal must have been received in writing by the Company at its
executive offices on or before November 30, 1993.
INDEPENDENT CERTIFIED ACCOUNTANTS
On September 8, 1993, the Board of Directors selected the firm of Arthur
Andersen & Co. to examine and audit the business, books of account and other
records of the Company and its
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<PAGE>
subsidiaries for the year ended December 31, 1993. The Board has not selected
auditors for the year ended December 31, 1994. Representatives of Arthur
Andersen & Co. are expected to be present at the meeting with an opportunity to
make a statement if they desire to do so, and will be available to respond to
appropriate questions.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company (File No.
1-0953) pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") are
incorporated by reference into this Proxy Statement:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1992;
2. The Company's Quarterly Reports on Form 10-Q for the periods ended March
31, 1993, June 30, 1993 and September 30, 1993; and
3. All other reports filed by the Company pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the preceding fiscal year.
All documents hereafter filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Proxy Statement and until
the date on which the Special Meeting is held, March [15, 1994] or such later
date to which the Special Meeting is postponed, shall be deemed to be
incorporated by reference into this Proxy Statement and to be part hereof from
the date of filing of such documents or reports. Any statement contained in a
document incorporated or deemed to be incorporated by reference 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 hereafter filed
document which also is or is deemed to be incorporated by reference 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.
ADDITIONAL INFORMATION
ANY STOCKHOLDER OF THE COMPANY MAY BY WRITTEN OR ORAL REQUEST OBTAIN WITHOUT
CHARGE A COPY OF THE COMPANY'S 1992 ANNUAL REPORT ON FORM 10-K EXCLUDING
EXHIBITS, EXCEPT INFORMATION REQUIRED BY PART II OF THE FORM 10-K SET FORTH IN
THE COMPANY'S ANNUAL REPORT TO STOCKHOLDERS. REQUESTS SHOULD BE ADDRESSED TO
MR. THOMAS F. IRETON, SECRETARY, COLUMBIA REAL ESTATE
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<PAGE>
INVESTMENTS, INC., 10440 LITTLE PATUXENT PARKWAY, COLUMBIA, MARYLAND 21044.
Stockholders are urged to sign the enclosed proxy, which is solicited on
behalf of the Board of Directors, and return it at once in the enclosed
envelope.
By Order of the Board of Directors
DAVID J. GALLITANO, Chairman
<PAGE>
PRELIMINARY COPY Appendix A
PLAN OF DISSOLUTION AND LIQUIDATION
OF
COLUMBIA REAL ESTATE INVESTMENTS, INC.
This Plan of Dissolution and Liquidation (the "Plan") of Columbia Real
Estate Investments, Inc. (the "Company"), a Maryland corporation, is intended to
effect the complete, voluntary dissolution and liquidation of the Company in
accordance with the Maryland General Corporation Law (the "Maryland Law").
1. Stockholder Approval - Effective Date. This Plan shall become
effective (the "Effective Date") on the day it is adopted by the affirmative
vote of the holders of two-thirds of the outstanding shares of common stock, par
value $.01 per share (the "Common Stock"), entitled to vote thereon, at the
Special Meeting of Stockholders to be held on March [15], 1994.
2. Notice to Creditors and Employees. Upon the approval of the Plan, the
Company shall mail a notice to its known creditors at their addresses as shown
on the records of the Company and to its employees, either at their home
addresses as shown on the records of the Company or at their business addresses.
The notice shall inform such persons that the Company's stockholders have
approved the dissolution of the Company.
3. Abandonment of Dissolution. At any time before the articles of
dissolution are accepted for record by the Department of Assessments and
Taxation ("Department"), the Board may abandon or rescind the dissolution by
following the same procedure required for its approval.
4. Liquidation Process. Upon the approval of the Plan, the Company shall
commence liquidating its assets.
(a) The Company shall sell, exchange or otherwise dispose of its assets to
the extent such can be accomplished for a consideration and upon terms and
conditions deemed by the Board of Directors to be in the best interests of the
Company and its stockholders. Sales of subsidiaries may take the form of stock
sales or asset sales. The Company may request its advisor, Columbia National,
Incorporated, to sell the assets subject to the oversight of the Board.
(b) After paying or making provisions for the debts, expenses, taxes and
all other obligations of the Company, all of the assets of the company shall be
distributed pro rata to the stockholders. Such distribution may occur all at
once or in a series of payments and may be made in cash or in kind, and in
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such manner, as the Board of Directors, in its discretion, may determine.
(c) The Board of Directors may appoint a committee to oversee the
liquidation process.
(d) The members of the Board shall continue to receive compensation for as
long as they remain members of the Board until the final distribution of the
assets of the Company.
5. Filing of Articles of Dissolution. The Company shall file articles of
dissolution with the Department no sooner than 20 days after the giving of
notice to creditors of stockholder approval of the dissolution. Such articles
shall contain the information, and be accompanied by certificates regarding the
payment of taxes, required by Maryland Law.
(a) Upon the acceptance for record by the Department of the articles of
dissolution, the Company is dissolved but will continue to exist for the purpose
of paying, satisfying and discharging any existing debts or obligations,
collecting and distributing any remaining assets and doing all other acts
required to liquidate and wind up its business and affairs.
Upon acceptance for record of the articles of dissolution, the Company's stock
transfer books will be closed.
(b) The Company's directors shall be the trustees of its assets for
purposes of liquidation after the acceptance of the articles of dissolution,
unless and until a court appoints a receiver. The director-trustees will be
vested in their capacity as trustees with full title to all the assets of the
Company.
(c) The director-trustees shall (i) collect and distribute any remaining
assets, applying them to the payment, satisfaction and discharge of existing
debts and obligations of the Company, including necessary expenses of
liquidation; and (ii) distribute the remaining assets among the stockholders.
(d) The director-trustees may (i) carry out the contracts of the Company;
(ii) sell all or any part of the assets of the Company at public or private
sale; (iii) sue or be sued in their own names as trustees or in the name of the
Company; and (iv) do all other acts consistent with law and the charter of the
Company necessary or proper to liquidate the Company and wind up its affairs.
6. Power of the Directors. Implementation of this Plan shall be under the
direction of the directors, who shall have full authority to carry out the
provisions of this Plan or such other actions as they deem appropriate without
further stockholder action.
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Preliminary Copy
COLUMBIA REAL ESTATE INVESTMENTS, INC.
Proxy for Special Meeting on March [15], 1994
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Thomas E. Ireton and Douglas Douglas, or
either one of them, as Proxies, with full power of substitution, to represent
the undersigned at the Special Meeting of the Stockholders of Columbia Real
Estate Investments, Inc. to be held in Columbia, Maryland, on March 15, 1994,
and any adjournments thereof, and to vote the shares of said Company standing in
the name of the undersigned with all powers the undersigned would possess if
personally present at such meeting.
1. Approval of the Plan of Dissolution and Liquidation
FOR. [ ] AGAINST. [ ] ABSTAIN. [ ]
THIS PROXY WILL BE VOTED AS SPECIFIED, OR IF NO SPECIFICATION
IS MADE, THIS PROXY WILL BE VOTED FOR THE MATTER SPECIFIED ABOVE.
<PAGE>
(continued from other side)
Dated: _____________________________, 1994
__________________________________________________
Signature
__________________________________________________
Signature (see note below)
NOTE: Please sign exactly as your name or names
appear hereon. Joint owners should each sign
personally. When signing as an attorney, executor,
trustee or guardian, please give your full title as
such.
IMPORTANT: PLEASE SIGN, DATE AND RETURN PROMPTLY.
