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 EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 16, 1995
HEALTH AND RETIREMENT PROPERTIES TRUST
(Exact name of registrant as specified in charter)
Maryland 1-9317 04-6558834
(State or other (Commission file (IRS employer
jurisdiction of number) identification no.)
incorporation)
400 Centre Street, Newton, Massachusetts 02158
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 617-332-3990
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Item 5. Other Events.
A. Offering of Shares by HPT. The Board of Trustees of Health &
Retirement Properties Trust ("HRP") has approved the plan of Hospitality
Properties Trust ("HPT"), currently a wholly owned subsidiary of HRP, to offer
to the public 7,500,000 of HPT's common shares of beneficial interest. In March
1995, HPT acquired 21 Courtyard by Marriott(R) hotels for $179.4 million.
Funding for this acquisition, including startup, closing and option costs, was
provided to HPT by HRP as a demand loan in the original principal amount of
$163.3 million (the "HRP Loan"). In addition to the HRP Loan, HRP purchased
40,000 shares of HPT for $1.0 million ($25.00 per share). Upon completion of
HPT's offering, 16 additional Courtyard by Marriott(R) hotels will be purchased
by HPT for $149.6 million, HRP will purchase directly from HPT an additional
3,960,000 shares at $25.00 per share by cancelling $99.0 million of the HRP Loan
and HRPT Advisors, Inc. ("Advisors") will purchase directly from HPT 250,000
shares at $25.00 per share. HPT has accepted a commitment for a $200.0 million
credit line (the "Acquisition Line") which is expected to close concurrently
with the completion of HPT's offering. The net proceeds of HPT's offering, the
sale of shares to Advisors and amounts drawn under the Acquisition Line will be
used by HPT to purchase the additional 16 Initial Hotels and to repay the
remaining balance on the HRP Loan. At the conclusion of these transactions
(assuming no exercise of the underwriters' option to purchase up to 1,125,000
shares of HPT solely to cover overallotments), the ownership structure of HPT
will be as follows:
HPT Public Shareholders 7,500,000 Shares (63.8%)
HRP 4,000,000 Shares (34.1%)
Advisors 250,000 Shares (2.1%)
HPT
Ownership of 37 Courtyard by Marriott(R) Hotels
The offering by HPT is subject to the satisfaction of various
conditions, including the effectiveness of a registration statement with respect
to HPT's shares. A registration statement relating to HPT's shares has been
filed by HPT with the Securities and Exchange Commission but has not yet become
effective.
B. Legal Proceedings. In the ordinary course of their business,
Advisors and HRP are occasionally involved in litigation. Early in 1995, HRP
commenced a foreclosure action to enforce indemnities given in connection with
the surrender of certain leaseholds to, and the purchase of certain properties
by, HRP in 1992. In May 1995, the defendants in the foreclosure action and
parties related to HRP's former tenants and sellers asserted claims against HRP,
Advisors, Messrs. Portnoy and Martin and others, including Sullivan & Worcester,
counsel to HRP, HPT and Advisors. The claims allege, among other things, fraud,
conflicts of interest,
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breach of fiduciary duties, legal malpractice and civil conspiracy in connection
with the leasehold surrenders, the sales and the indemnities which underlie the
foreclosure action and that the foreclosure defendants and third party
plaintiffs suffered substantial damages as a result. Although the outcome of
this litigation is currently indeterminable, each of the third party defendants
believes the claims against it are without merit and intends to defend and deny
the allegations in these claims and HRP intends to pursue the original
foreclosure action. HPT is not a party to this litigation.
SIGNATURES
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.
HEALTH AND RETIREMENT PROPERTIES TRUST
Date: July 27, 1995 By: /s/ David J. Hegarty
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David J. Hegarty
President
