UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): January 15, 2003
SHELBOURNE PROPERTIES II, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-16341 04-3502382
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(State or other jurisdiction of incorporation) (Commission File No.) (IRS Employer Identification No.)
7 Bulfinch Place
Suite 500
Boston, Massachusetts 02114
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (617) 570-4600
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 15, 2003, a joint venture owned by the respective operating
partnerships of the Company, Shelbourne Properties I, Inc. and Shelbourne
Properties III, Inc. (the "Shelbourne REITs") acquired from Realty Holdings of
America, LLC, an unaffiliated third party, a 100% interest in an entity that
owns 20 motel properties triple net leased to an affiliate of Accor SA. The cash
purchase price, which was provided by working capital, was approximately
$2,700,000, of which approximately $1,096,000, $878,000 and $726,000 was paid by
the Company, Shelbourne Properties I, Inc. and Shelbourne Properties III, Inc.,
respectively. The properties are also subject to existing mortgage indebtedness
in the current principal amount of approximately $74,220,000.
The Shelbourne REITs formed the joint venture and acquired the interest in
the new properties in order to facilitate the disposition of the other
properties of the Shelbourne REITs and the distribution to shareholders of the
sales proceeds in accordance with the plans of liquidation of the Shelbourne
REITs approved by stockholders in October 2002. Prior to the acquisition of the
Accor S.A. properties, the holder of the Class A Preferred Units of the
operating partnerships had the right to cause the operating partnerships to
purchase the Preferred Units at a substantial premium to their liquidation value
(at the time of the acquisition, a premium of $6,603,000 in the case of the
Company's operating partnership and $16,264,000 for all three operating
partnerships) unless the operating partnerships maintained at least
approximately $54,200,000 of aggregate indebtedness ($22,000,000 in the case of
the Company's operating partnership) guaranteed by the holder of the Preferred
Units and secured by assets having an aggregate market value of at least
approximately $74,800,000 ($30,368,000 in the case of the Company's operating
partnership). These requirements significantly impaired the ability of the
Shelbourne REITs to sell their properties and make distributions in accordance
with their plans of liquidation. In lieu of these requirements, the operating
partnerships agreed to acquire the Accor S.A. properties for the benefit of the
holder of the Preferred Units. The holder of the Preferred Units does, however,
continue to have the right, under certain limited circumstances which the
Shelbourne REITs do not anticipate will occur, to cause the operating
partnerships to purchase the Preferred Units at the premium described above. The
terms of the Preferred Units were also modified to eliminate the $2,500,000
aggregate liquidation preferences to which the holder of the Preferred Units was
previously entitled ($1,015,148 in the case of the Company's operating
partnership).
The holder of the Preferred Units has the right to require the operating
partnerships to acquire other properties for its benefit at an aggregate cash
cost to the operating partnerships of $2,500,000 (approximately $1,000,000 of
which would be paid by the Company's operating partnership). In that event the
Accor S.A. properties would not be held for the benefit of the holder of the
Preferred Units and would be disposed of as part of the liquidation of the
Shelbourne REITs.
The foregoing description of the transaction does not purport to be
complete, and is qualified in its entirety by reference to the Purchase
Agreement (and all exhibits thereto) dated as of January 15, 2003, the
Modification Agreement, dated as of January 15, 2003 and the Amended and
Restated Partnership Unit Designation for the operating partnership, copies of
which are attached hereto as Exhibits 10.1, 10.2 and 4.1, respectively, and
which are incorporated by reference herein.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits:
4.1 Restated Partnership Unit Designation for 5% Class A Preferred
Partnership Units (incorporated by reference to Exhibit E-2 of
Exhibit 10.2 to the Form 8-K filed by Shelbourne Properties I, Inc.
on January 16, 2003)
10.1 Purchase Agreement, dated as of January 15, 2003, between the
Shelbourne JV and Realty Holdings of America, LLC (incorporated by
reference to Exhibit 10.1 to the Form 8-K filed by Shelbourne
Properties I, Inc. on January 16, 2003)
10.2 Agreement, dated as of January 15, 2003, among Presidio Capital
Investment Company, LLC (and certain of its subsidiaries),
Shelbourne Management, NorthStar Capital Investment Corp., each of
the Shelbourne REITs and its operating partnership and HX Investors,
L.P. (incorporated by reference to Exhibit 10.2 to the Form 8-K
filed by Shelbourne Properties I, Inc. on January 16, 2003)
99.1 Press Release (incorporated by reference to Exhibit 99.1 to the Form
8-K filed by Shelbourne Properties I, Inc. on January 16, 2003)
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.
SHELBOURNE PROPERTIES II, INC.
By: /s/ Michael L. Ashner
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Name: Michael L. Ashner
Title: President
Dated: January 15, 2003
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EXHIBIT INDEX
No. Exhibit Page
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4.1 Restated Partnership Unit Designation for 5% Class A Preferred Partnership Units 4.1-1
(incorporated by reference to Exhibit E-2 of Exhibit 10.2 to the Form 8-K filed
by Shelbourne Properties I, Inc. on January 16, 2003)
10.1 Purchase Agreement, dated January 15, 2003, between the Shelbourne JV and Realty 10.1-1
Holdings of America, LLC (incorporated by reference to Exhibit 10.1 to the Form
8-K filed by Shelbourne Properties I, Inc. on January 16, 2003)
10.2 Agreement, dated as of January 15, 2003, among Presidio Capital Investment 10.2-1
Company, LLC (and certain of its subsidiaries), Shelbourne Management, NorthStar
Capital Investment Corp., each of the Shelbourne REITs and its operating
partnership and HX Investors, L.P. (incorporated by reference to Exhibit 10.2 to
the Form 8-K filed by Shelbourne Properties I, Inc. on January 16, 2003)
99.1 Press Release (incorporated by reference to Exhibit 99.1 to the Form 8-K filed 99.1-1
by Shelbourne Properties I, Inc. on January 16, 2003)
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