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8-K - FSP PHOENIX TOWER CORPeps5032.htm

Exhibit 99.1

 

fsp_investments(high_res)

 

January 31, 2013

FSP Phoenix Tower Corp. Liquidating Trust

 

On December 20, 2012, the property owned by FSP Phoenix Tower Corp. (the "Company") in Houston, Texas was sold to a third party for a gross sale price of $123,750,000. On December 21, 2012, the Company filed its certificate of dissolution with the Secretary of State of the State of Delaware, pursuant to the plan of dissolution previously approved by the Board of Directors and stockholders of the Company (the “Plan of Dissolution”). The Plan of Dissolution was described in the information statement dated June 1, 2012 and mailed to all holders of preferred stock in the Company on or about June 7, 2012 (the “Information Statement”). The certificate of dissolution became effective as of the close of business on December 21, 2012, at which time the Company’s stock transfer books were closed. Since the filing of the certificate of dissolution, the Company has been winding up its business in accordance with the Plan of Dissolution. The Information Statement can be accessed on the SEC’s website via the link below:

 

http://www.sec.gov/Archives/edgar/data/1354309/000117152012000546/eps4731.htm

 

In accordance with the Plan of Dissolution, on December 21, 2012, the Company transferred all of its assets to FSP Phoenix Tower Corp. Liquidating Trust (the “Trust”) and the Trust assumed all of the Company’s obligations and liabilities. The assets transferred to the Liquidating Trust included the net proceeds from the sale of the property and any free cash remaining in the Company’s operating accounts. On January 4, 2013, the Trust made an initial liquidating distribution in the amount of $99,000 per share of preferred stock to holders of record as of the close of business on December 21, 2012, who are deemed to be beneficiaries (the “Beneficiaries”) of the Trust.

 

Pursuant to Delaware law, the Trust has retained the reserves (the “Reserves”) deemed necessary to settle its outstanding obligations and to fund future expenses in connection with carrying out the Plan of Dissolution, and anticipates making one or more future liquidating distributions to the Beneficiaries to the extent it determines there are excess funds to make further distributions. As disclosed in the Information Statement, Delaware law requires that the Company continue to exist for at least a three-year period to wind up its activities. During that time, we anticipate that the Trust will make one or more additional liquidating distributions to the Beneficiaries in amounts and on dates to be determined. However, there can be no assurance that there will be sufficient funds available to make any such future liquidating distributions.

 

The table below shows the calculation of the liquidation value per share, which was used to determine the amount that will be reported on your 2012 IRS Form 1099-DIV that you will receive under separate cover. Stockholders are urged to consult their own tax advisors as to the specific tax consequences of the dissolution, including the applicable, federal, state, local and foreign tax consequences, in light of their particular circumstances.

401 Edgewater Place - Wakefield, MA 01880-6207 - 800-950-6288

FSPInvestments@franklinstreetproperties.com

 
 

Calculation of Liquidation Value:     
Sales price  $123,750,000 
Customary closing costs & adjustments   (1,609,370)
Payoff secured line of credit & accrued interest   (15,036,535)
Net operating liabilities   (421,369)
Liquidation Value  $106,682,726 
      
Shares:     
Preferred Shares   1,050 
Common Share liquidation equivalent   0.1 
    1,050.1 
      
Liquidation Value per Preferred Share (1)  $101,593 
      

 

Notes:

 

(1) The liquidation value per Preferred Share in the above table was rounded up to the nearest dollar. The actual amount per Preferred Share that will be reported on your 2012 IRS Form 1099-DIV that you will receive under separate cover will be $101,592.92.

 

The next table shows the components of the liquidation value, including the Reserves, in the aggregate and per share, with some notes describing the components.

 

   In The   Amount 
Components of Liquidation Value:  Aggregate   Per Share 
         
Initial Preferred Share distribution  $103,950,000   $99,000 
Escrow required by purchase and sale agreement (1)   1,500,000    1,429 
Common Share liquidation anticipated (2)   10,159     
General reserve for unknown contingencies   1,222,567    1,164 
Liquidation Value  $106,682,726   $101,593 

 

Notes:

 

(1) The purchase and sale agreement required the Company to deposit $1.5 million in an escrow account held by the title company for a period of nine months from the closing date as security for any claim made by the buyer for breach of any the Company’s representations in the purchase and sale agreement. We anticipate that all of these funds will be returned to the Trust on or about September 20, 2013 and be available for one or more additional liquidating distributions to the Beneficiaries in amounts and on dates to be determined. However, there can be no assurance all or any portion of these funds will be returned to the Trust or that there will be sufficient funds available to make any such future liquidating distributions.

 
 

 

(2) This amount represents the anticipated calculation of the cash value of the one share of the Company’s common stock that was previously held by Franklin Street Properties Corp. (“FSP Corp.”). As previously disclosed in the Information Statement, according to the terms of the certificate of incorporation of the Company, when the Company dissolved on December 21, 2012, FSP Corp., as the sole common stockholder, became entitled to receive the equivalent of one-tenth of a preferred share as part of a distribution to all stockholders, pro rata, but only after the payment of preferential amounts to the preferred stockholders of the Company of at least $100,000 per share. In the Information Statement, we estimated that the aggregate amount of total cash distributions to FSP Corp. with respect to its sole share of common stock would be approximately $10,000.

Please feel free to contact our Investor Services group (800-950-6288) and speak directly with Georgia Touma, Assistant Vice President and Director of Investor Services, or with one of the Investor Services Specialists, Lara Ryan or Michelle Sullivan, with any questions you may have.

 

/s/ Janet P. Notopoulos

Janet P. Notopoulos

President – FSP Property Management LLC, in its capacity as Trustee of FSP Phoenix Tower Corp. Liquidating Trust

 

Safe Harbor for Forward-Looking Statements

 

Statements in this letter regarding the amount or timing of liquidating distributions and any other statements about the Company managements’ future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” estimates and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: changes in government regulations, geopolitical events, unanticipated tax consequences, unanticipated claims and expenses, and the other factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 and its most recent quarterly report filed with the SEC. The Company disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this letter.