<PAGE>1
CRI LIQUIDATING REIT, INC.
The CRI Building
11200 Rockville Pike
Rockville, Maryland 20852
March 25, 1996
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
CRI Liquidating REIT, Inc. to be held on May 7, 1996. The formal Notice of the
meeting and a Proxy Statement describing the purposes of the meeting are
enclosed. Please give them your prompt and careful attention.
Please read the Proxy Statement and complete, sign and return your proxy in
the enclosed envelope promptly. No postage is necessary if mailed in the United
States.
Thank you for your cooperation and prompt reply.
Sincerely,
WILLIAM B. DOCKSER
Chairman of the Board
<PAGE>2
CRI Liquidating REIT, Inc.
---------------
Notice of Annual Meeting of Shareholders
-----------------
The Annual Meeting of Shareholders of CRI Liquidating REIT, Inc. (the
"Corporation") will be held on Tuesday, May 7, 1996, at the Hyatt Regency
Bethesda, One Bethesda Metro Center, Bethesda, Maryland, for the following
purposes:
1. To elect two Class I directors as set forth in the accompanying Proxy
Statement to hold office until their respective successors are elected
and qualified; and
2. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on March 18, 1996 as
the record date for shares entitled to vote at the meeting.
A Proxy Statement, proxy and the Corporation's Annual Report to
Shareholders (including audited financial statements) for the fiscal year ended
December 31, 1995 are enclosed with this Notice.
You are requested, if you cannot be present at the meeting, to complete,
sign and return the proxy in the enclosed business reply envelope promptly.
BY ORDER OF THE BOARD OF DIRECTORS
H. WILLIAM WILLOUGHBY
Secretary
March 25, 1995
IMPORTANT: PLEASE FILL IN, DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY IN
THE POSTAGE-PAID ENVELOPE PROVIDED TO ENSURE THAT YOUR SHARES ARE REPRESENTED AT
THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH TO
DO SO EVEN THOUGH YOU HAVE PREVIOUSLY SENT IN YOUR PROXY.
<PAGE>3
CRI Liquidating REIT, Inc.
The CRI Building
11200 Rockville Pike
Rockville, Maryland 20852
-------------------
PROXY STATEMENT
-------------------
This Proxy Statement is furnished by the Board of Directors (the "Board")
in connection with its solicitation of proxies for use at the Annual Meeting of
Shareholders on May 7, 1996, and at any and all adjournments thereof (the
"Meeting"). Mailing of this Proxy Statement will commence on or about March 25,
1996. The Corporation's Annual Report to Shareholders (including audited
financial statements) for the fiscal year ended December 31, 1995 and a form of
proxy for use at the Meeting are enclosed.
If the proxy is properly executed and returned, the shares it represents
will be voted at the Meeting in accordance with the instructions noted thereon.
If no direction is indicated, such shares will be voted: (1) FOR the nominated
directors; and (2) for or against such other matters as may properly come before
the Meeting in the discretion of the proxy holders. The Corporation's
management knows of no matter to be brought before the Meeting which is not
referred to in the Notice of Meeting and this Proxy Statement. If, however, any
other matter comes before the Meeting, the proxy will be voted in accordance
with the judgment of the person or persons voting such proxy, unless the proxy
contains instructions to the contrary. Any shareholder executing a proxy has
the power to revoke it at any time before it is voted by submitting a duly
executed proxy bearing a later date, or by attending the Meeting and orally
withdrawing the proxy.
The voting securities of the Corporation consist of shares of common stock,
$.01 par value per share ("Common Shares"), of which 30,422,711 Common Shares
were issued and outstanding at the close of business on the record date for the
Meeting, March 18, 1996. Shareholders of record at the close of business on
march 18, 1996 will be entitled to vote at the Meeting. Each Common Share is
entitled to one vote. Shareholders do not have cumulative voting rights. The
election of directors as well as any other matters or proposals that come before
the meeting will be determined by the affirmative vote of at least a majority of
the Common Shares represented at the Meeting in person or by proxy, and entitled
to vote. The holder of each outstanding Common Share is entitled to vote for as
many nominees as there are directors to be elected. An abstention or broker
non-vote on any matter will not change the number of votes cast for or against
the matters.
ELECTION OF DIRECTORS
Members of the Corporation's Board serve staggered three-year terms. Two
Class I directors are to be elected at the Meeting, each to serve until the 1999
Annual Meeting of Shareholders or until their successors have been duly elected
and qualified or until the dissolution of the Corporation. Unless authority to
vote for one or both nominees is withheld, it is intended that Common Shares
represented by proxies in the form accompanying this Proxy Statement will be
voted for the election of the nominees listed below, each of whom is currently a
Class I director of the Corporation. In case any such nominee becomes unable or
unwilling to stand for election as a director for any reason not currently known
or contemplated, the Common Shares represented by such proxies will be voted by
the proxy holders for such other person as may be designated by the Board.
CRIIMI MAE Inc. ("CRIIMI MAE"), which owns approximately 57% of the Common
Shares, is the beneficial owner of a majority of the outstanding Common Shares
and intends to vote in favor of the nominees, thus assuring their election.
<PAGE>4
Persons Nominated for Election as Directors
<TABLE>
<CAPTION>
Class I Directors
Name Principal Occupation Age
---- -------------------- ---
<S> <C> <C>
H. William Willoughby Director and Secretary of the 49
Corporation and of CRIIMI MAE
since 1989; President of the
Corporation and of CRIIMI MAE
since 1990; Director and share-
holder of C.R.I., Inc. ("CRI")
an affiliate of the Corporation's
adviser, since 1974; Secretary of
CRI from 1974 to 1990 and President
of CRI since 1990.
Name Principal Occupation Age
---- -------------------- ---
Garrett G. Carlson, Sr.* Director of the Corporation and of 59
CRIIMI MAE since 1989; Chairman of
the Board of SCA Realty Holdings,
Inc. since 1985; President of Can-
American Realty Corp. and Canadian
Financial Corp. since 1979 and 1974,
respectively; Vice Chairman of
Shelter Development Corporation Ltd.
since 1983 and President of Garrett
Real Estate Development since 1982.
The remainder of the Board constitutes the Class II and Class III directors, none of whom will stand for election at the Meeting, as
their terms will expire in 1997 and 1998, respectively.
</TABLE>
<PAGE>5
<TABLE>
<CAPTION>
Directors Continuing in Office
Class II Directors
Year Term
Name Principal Occupation Age Expires
---- -------------------- --- ---------
<S> <C> <C>
Robert F. Tardio* Director of the Corporation and 66 1997
CRIIMI MAE since 1989; Chairman
of the Tardio Corporation from
1986 to 1995; Chairman of the
Board and Chief Executive Officer
of Sovran Bank/Maryland from April
1986 to June 1986; Chairman of the
Board and Chief Executive Officer
of Suburban Bancorp and Suburban
Bank, Bethesda, MD, from 1979 to
1986; Independent Financial Con-
sultant from 1986 to present;
Director of Bell Atlantic/Maryland,
Washington Mutual Investors Fund
(Advisory Board), AW Industries and
Chairman of the Washington Metro-
politan Airports Authority.
Year Term
Name Principal Occupation Age Expires
---- -------------------- --- ---------
Larry H. Dale* Director of the Corporation and 50 1997
of CRIIMI MAE since January 1996;
Senior Advisor, Housing Investment
Fund, Federal National Mortgage
Association ("Fannie Mae");
Executive Director of Fannie Mae's
National Housing Impact Division
from 1993 to 1995; Senior Vice
President-marketing and mortgage-
backed securities and Senior Vice
President-multifamily finance and
housing initiatives for Fannie Mae
from 1987 to 1993; Vice President
with Newman and Associates from
1984 to 1987; President of Mid
City Financial Corporation from
1981 to 1983; employed by the
U.S. Department of Housing and
Urban Development from 1971 to 1981;
serving as deputy to the Assistant
Secretary for Housing/FHA Commissioner
from 1979 to 1981.
- ----------------------
*Unaffiliated Director
</TABLE>
<PAGE>6
<TABLE>
<CAPTION>
Class II Directors
Name Principal Occupation Age Expires
---- -------------------- --- ---------
<S> <S> <C>
William B. Dockser Chairman of the Board of the 59 1998
Corporation and of CRIIMI MAE
since 1989; Chairman of the
Board and shareholder of CRI
since 1974.
G. Richard Dunnells* Director of the Corporation and 58 1998
of CRIIMI MAE since 1991; Partner
in the Washington, D.C. office and
Director of the law firm of Holland
& Knight since January 1994; Chairman
of the Washington, D.C. law firm of
Dunnells & Duvall from 1989 to 1993;
Senior Partner of such law firm from
1973 to 1993; Special Assistant to
the Under-Secretary and Deputy
Assistant Secretary for Housing and
Management with the U.S. Department
of Housing and Urban Development from
1969 to 1973; President's Commission
on Housing from 1981 to 1982.
- ----------------------
*Unaffiliated Director
</TABLE>
During 1995, the Board met twice in person, three times by conference
telephone and action was taken once by unanimous written consent. All members
of the Board then serving attended at least 75% of the total number of meetings
of the Board and Board committees on which they served. Pursuant to the
Corporation's Bylaws, a majority of the Board shall at all times consist of
directors who do not perform any services for the Corporation other than as a
director and are not officers, directors, or employees of CRI ("Unaffiliated
Directors").
The Board has an Audit Committee currently comprised of Messrs. Carlson,
Tardio and Dunnells. A majority of the Audit Committee is required to consist
of Unaffiliated Directors. The functions performed by the Audit Committee are
to recommend independent auditors to the Corporation; review the scope of the
audit, audit fees, the audit report and the management letter with the
Corporation's independent auditors' review the financial statements of the
Corporation; review and approve non-audit services provided by the independent
auditors; and consult with the independent auditors and management with regard
to the adequacy of internal controls. The Audit Committee met twice in 1995.
The Board currently does not have a standing compensation or nominating
committee.
Executive Officers. In addition to Messrs. Dockser and Willoughby, whose
business experience is set forth above, Jay R. Cohen, 55, has served as
Executive Vice President of the Corporation and of CRIIMI MAE since 1989, and as
Treasurer of the Corporation and of CRIIMI MAE since 1990. Mr. Cohen was Senior
<PAGE>7
Vice President - Mortgages of CRI from 1983 to June 1995 and President of CRICO
Mortgage Company, Inc., from 1985 to June 1995, at which time it merged into
CRIIMI MAE Management, Inc., a wholly owned subsidiary of CRIIMI MAE, in
connection with a transaction described below under "Certain Transactions".
Frederick J. Burchill, 47, has served as Executive Vice President of the
Corporation since 1995 and of CRIIMI MAE since 1991. Mr. Burchill served as
Senior Vice President of CRI from 1990 to June 1995. Cynthia O. Azzara, 36, has
served as Chief Financial Officer of the Corporation and of CRIIMI MAE since
1994 and as Senior Vice President of the Corporation and of CRIIMI MAE since
1995. Ms. Azzara served in the Accounting and Finance Departments of CRI from
1985 to June 1995. Deborah A. Linn, 40, has served as General Counsel of the
Corporation and of CRIIMI MAE since 1995. Ms. Linn served in the Office of
General Counsel for CRI from 1988 to June until June 1995, serving as General
Counsel from 1992 until June 1995. Executive officers of the Corporation are
elected annually by the Board and serve at the Board's discretion.
BENEFICIAL OWNERSHIP OF COMMON SHARES
The following tables sets forth certain information regarding the
beneficial ownership of Common Shares as of March 1, 1996 by each person known
by the Corporation to own beneficially more than 5% of the outstanding Common
Shares, as well as certain information concerning the ownership of Common Shares
by directors or officers of the Corporation. Unless otherwise indicated, the
voting and investment power for the Common Shares listed are held solely by the
named holder.
<PAGE>8
<TABLE>
<CAPTION>
Common Shares Percent of Outstanding
Name Beneficially Owned Common Shares Beneficially Owned
- ----------------- ------------------ --------------------------------
<S> <C> <C>
CRIIMI MAE Inc. 17,199,307 56.5%
Larry H. Dale 1,000 Less than 1%
G. Richard Dunnells 615 Less than 1%
All Directors and Executive
Officers as a Group (10
persons) 1,615 Less than 1%
</TABLE>
To the best of the Corporation's knowledge, as of March 1, 1996, no other
person owned more than 5% of the outstanding Common Shares, and no other officer
of director of the Corporation owned any Common Shares.
Based solely on its review of Forms 3 and 4 and amendments thereto
furnished to the Corporation, and written representations from certain reporting
persons that no Forms 5 were required for those persons, the Corporation
believes that all directors, officers and beneficial owners of more than 10% of
the Common Shares have filed on a timely basis Forms 3, 4 and 5 as required in
the fiscal year ended December 31, 1995.
In connection with the incurrence by CRIIMI MAE of certain indebtedness,
CRIIMI MAE has pledged 6,950,000 of the Corporation's Common Shares owned by
CRIIMI MAE (the "Pledged Shares") to Signet Bank. Under the agreements
relating to the foregoing indebtedness, Signet Bank is entitled to direct the
voting of the Pledged Shares on any fundamental change item (which excludes any
election of directors or other "housekeeping" matters, but includes any matter
which may adversely affect the rights of holders of Common Shares or their right
to receive distributions thereon or the timing of such distributions). If
CRIIMI MAE defaults on its obligations under such agreements, Signet Bank may
direct the voting of the Pledge Shares on all matters. Except as described
above, the voting and investment powers for the Common Shares owned by CRIIMI
MAE are held solely by CRIIMI MAE.
EXECUTIVE COMPENSATION
None of the Corporation's executive officers received cash or any other
form of compensation from the Corporation during the year ended December 31,
1995. See "Certain Transactions."
DIRECTOR'S REMUNERATION
Each Unaffiliated Director receives an aggregate fee of $10,000 per year
for services as a director plus a fee of $500 (for telephone meetings) and
$1,000 (for in-person meetings) for each meeting in which such director
participates, including committee meetings held on days when the Board is not
meeting. In addition, the Corporation reimburses directors and officers
(including those affiliated with CRI) for travel and other expenses incurred in
connection with their duties as directors or officers of the Corporation.
Messrs. Tardio, Carlson and Dunnells were each paid $10,000 by the Corporation
for their services as Unaffiliated Directors during the year ended December 31,
1995, plus traveling expenses, $1,000 per day for meetings attended and $500 per
telephonic meeting in which they participated. In January 1996, the Board
authorized an increase in the number of directors serving on the Board from five
to six and authorized a decrease in the annual compensation for services to each
unaffiliated member of the Board from $10,000 to $7,000. See "Election of
Directors" above.
<PAGE>9
CERTAIN TRANSACTIONS
The Corporation has entered into an agreement (the "Advisory Agreement")
with CRI Insured Mortgage Associates Adviser Limited Partnership (the "Adviser")
under which the Adviser is obligated to provide administrative services for the
Corporation, evaluate and negotiate voluntary dispositions of mortgage
investments and conduct the Corporation's day-to-day affairs. Under the
Advisory Agreement, the Adviser is entitled to receive annual fees based on
amounts invested by the Corporation in mortgage investments and incentive fees
based on proceeds of dispositions of certain mortgage investments by the
Corporation. In addition to the fees payable pursuant to the Advisory
Agreement, from inception through June 30, 1995, the Adviser and its affiliates
were also entitled to reimbursement for certain expenses incurred in connection
with the operation and administration of the Corporation, as further described
below. Pursuant to the Advisory Agreement, in 1995, the Corporation paid the
Adviser annual fees of $416,007 and no incentive fees. CRI is the general
partner of the Adviser, and Messrs. Dockser and Willoughby own a majority of the
limited partnership interest in the Adviser. Messrs. Dockser and Willoughby
are all of the shareholders and directors of CRI.
The Advisory Agreement may be terminated by the Corporation or the Adviser
solely for "cause" (as defined in the Advisory Agreement). If the Corporation
terminates the Advisory Agreement other than for cause or the Adviser terminates
the Advisory Agreement for cause, in addition to compensation otherwise due, the
Corporation will be required to pay the Adviser a fee equal to the annual fee
paid or payable to the Adviser with respect to the previous fiscal year.
On June 30, 1995, CRIIMI MAE acquired the mortgage servicing, origination
and advisory businesses conducted by CRI and its affiliates, including certain
of the physical assets and work force of the Adviser (the "Merger"). The
Adviser will continue to perform advisory services under the Advisory Agreement
following the Merger. However, pursuant to a reimbursement agreement (the
"Reimbursement Agreement") entered into in connection with the Merger between
the Adviser and CRIIMI MAE Management, Inc., a wholly owned subsidiary of CRIIMI
MAE (the "Management Corporation"), the employees of the Management Corporation
perform certain functions on behalf of the Adviser under the Advisory Agreement.
Neither the Management Corporation nor CRIIMI MAE, which owns approximately 57%
of the Corporation, will receive advisory fees under the Advisory Agreement.
However, commencing July 1, 1995, the Management Corporation is reimbursed, at
cost, for its employees' time and expenses pursuant to the Reimbursement
Agreement. During 1995, the Corporation reimbursed CRI $125,482 for services
provided on the Corporation's behalf in connection with the Advisory Agreement
and reimbursed the Management Corporation $122,938 pursuant to the Reimbursement
Agreement.
CRIIMI MAE also had a similar advisory agreement with the Advisor for the
period of January 1, 1995 through June 30, 1995 (the "CRIIMI MAE Advisory
Agreement"). Pursuant to the CRIIMI MAE Advisory Agreement, during this period
in 1995, CRIIMI MAE paid the Adviser (i) mortgage selection fees of $212,909,
(ii) annual fees (including the master servicing fees) of $1,493,297, and (iii)
no incentive fees. As a result of the Merger, the CRIIMI MAE Advisory Agreement
was terminated.
INDEPENDENT PUBLIC ACCOUNTANTS
The Corporation's financial statements for the fiscal year ended December
31, 1995 were audited by Arthur Andersen LLP. The directors have selected
Arthur Andersen LLP as the Corporation's auditors to examine the financial
statements of the Corporation for 1996. A representative of Arthur Andersen LLP
will be present at the Meeting. This representative will have an opportunity to
make a statement, and will be available to respond to questions by shareholders.
<PAGE>10
OTHER MATTERS
The Board knows of no other business which will be presented at the
Meeting. If other matters properly come before the Meeting, the persons named
as proxy holders will voted on them in accordance with their best judgment.
The cost of this solicitation of proxies will be borne by the Corporation.
In addition to the use of the mails, some of the officers or agents of the
Corporation and/or regular employees of CRIIMI MAE Management, Inc. may solicit
proxies by telephone and telegraph. The Corporation will request brokerage
houses and other custodians, nominees and fiduciaries to forward soliciting
material to the beneficial owners of Common Shares held of record by such
persons and amy verify the accuracy of marked proxies by contacting record and
beneficial owners of the Common Shares. The Corporation will reimburse such
persons for their reasonable expenses incurred in forwarding such soliciting
materials.
<PAGE>11
1997 ANNUAL MEETING
Shareholders may present proposals to be considered for inclusion in the
Proxy Statement for the 1997 Annual Meeting of Shareholders provided such
proposals are received by the Corporation no later than December 1, 1996.
H. William Willoughby
Secretary
March 25, 1996 <PAGE>
