<PAGE>

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                             ---------------------

                                   FORM 10-K

                                 ANNUAL REPORT

                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                             ---------------------

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002       COMMISSION FILE NUMBER: 0-3777

                        PETRIE STORES LIQUIDATING TRUST
             (Exact name of Registrant as Specified in Its Charter)

<Table>
<S>                                            <C>
                   NEW YORK                                      22-6679945
       (State or Other Jurisdiction of                        (I.R.S. Employer
        Incorporation or Organization)                      Identification No.)

           201 ROUTE 17, SUITE 300                                 07070
            RUTHERFORD, NEW JERSEY                               (Zip Code)
   (Address of Principal Executive Offices)
</Table>

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (201) 635-9637

   FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
                                  REPORT: N/A

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      NONE

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                                (TITLE OF CLASS)

                          UNITS OF BENEFICIAL INTEREST

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports); and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X]     No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  [X]

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).  Yes [ ]     No [X]

     As of March 26, 2003, the most recent practicable date prior to the
printing of this report, there were 52,350,238 units of beneficial interest of
the Petrie Stores Liquidating Trust (the "Liquidating Trust") outstanding. On
June 28, 2002, the last business day of the Liquidating Trust's most recently
completed second quarter, the aggregate market value of the units of beneficial
interest held by non-affiliates was approximately $21.1 million, based upon the
closing price of $0.87 per unit of beneficial interest (as quoted on the OTC
Bulletin Board). For purposes of this calculation, the Liquidating Trust has
assumed that HBK Investments L.P., HBK Finance L.P., Franklin Resources, Inc.,
Charles Johnson, Robert Johnson, Jr., Fiduciary Trust International and T. Rowe
Price Associates, Inc. are not affiliates of the Liquidating Trust.

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      NONE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                                     INDEX

<Table>
<Caption>
                                                                         PAGE
                                                                         ----
<S>       <C>                                                            <C>
                                   PART I
Item 1.   Business....................................................     2
Item 2.   Properties..................................................     3
Item 3.   Legal Proceedings...........................................     3
Item 4.   Submission of Matters to a Vote of Security Holders.........     3

                                   PART II
Item 5.   Market for the Registrant's Common Equity and Related            4
          Security Holder Matters.....................................
Item 6.   Selected Financial Data.....................................     5
Item 7.   Management's Discussion and Analysis of Financial Condition      5
          and Results of Operations...................................
Item 7A.  Quantitative and Qualitative Disclosures About Market           10
          Risk........................................................
Item 8.   Financial Statements and Supplementary Data.................    10
Item 9.   Changes in and Disagreements with Accountants on Accounting     11
          and Financial Disclosure....................................

                                  PART III
Item 10.  Directors and Executive Officers of the Registrant..........    11
Item 11.  Executive Compensation......................................    12
Item 12.  Security Ownership of Certain Beneficial Owners and             13
          Management and Related Security Holder Matters..............
Item 13.  Certain Relationships and Related Transactions..............    14
Item 14.  Controls and Procedures.....................................    14

                                   PART IV
Item 15.  Exhibits, Financial Statement Schedules and Reports on Form     15
          8-K.........................................................
</Table>

                                        1
<PAGE>

                                     PART I

ITEM 1. BUSINESS

GENERAL

     The Petrie Stores Liquidating Trust (the "Liquidating Trust") is the
successor to Petrie Stores Corporation, a New York corporation that was
dissolved effective February 5, 1997 ("Petrie"). Since January 24, 1995, Petrie
(and from January 22, 1996, the Liquidating Trust) has been in liquidation
pursuant to Petrie's shareholder-approved Plan of Liquidation and Dissolution
(the "Plan of Liquidation"). Prior to December 9, 1994, the date on which Petrie
sold its retail operations (as more fully described below), Petrie and its
subsidiaries operated a chain of retail stores that specialized in the sale of
women's apparel.

     During its fiscal year ended January 28, 1995, Petrie undertook a
reorganization of its operations in order to separate its investment in Toys "R"
Us, Inc. ("Toys 'R' Us") from its retail operations and distribute its shares of
Toys "R" Us common stock, par value $.01 per share ("Toys Common Stock"), to
Petrie's shareholders without the incurrence of any significant federal income
tax by Petrie or its shareholders. In connection with such reorganization, on
December 9, 1994, Petrie completed the sale (the "Sale") to PS Stores
Acquisition Corp. ("PS Stores") of all of the stock of Petrie's former
subsidiary, Petrie Retail, Inc. ("Petrie Retail"), which then owned all of
Petrie's retail operations, for $190 million in cash plus the assumption of
certain of Petrie's liabilities. The Sale was consummated pursuant to a Stock
Purchase Agreement, dated as of August 23, 1994 and amended as of November 3,
1994, between Petrie and WP Investors, Inc., an affiliate of E.M. Warburg,
Pincus & Co., Inc. (the "Retail Operations Stock Purchase Agreement").

     On January 24, 1995, Petrie exchanged (the "Exchange") with Toys "R" Us
39,853,403 shares of Toys Common Stock held by Petrie, plus $165 million in cash
derived from the Sale, for 42,076,420 shares of Toys Common Stock, pursuant to
an Acquisition Agreement, dated as of April 20, 1994 and amended as of May 10,
1994, between Petrie and Toys "R" Us (the "Toys Acquisition Agreement"). The
Toys Acquisition Agreement had required, among other things, that Petrie sell
its retail operations prior to the consummation of the Exchange and that,
following the Exchange, Petrie liquidate and dissolve and distribute to its
shareholders all of its remaining assets, less an adequate provision for
Petrie's actual and contingent liabilities.

     Since January 24, 1995, the date on which Petrie's shareholders approved
the Plan of Liquidation, Petrie and its successor, the Liquidating Trust, have
(i) made five liquidating distributions to shareholders (or, in the case of the
Liquidating Trust, to unit holders) of an aggregate of 33,098,720 shares of Toys
Common Stock and approximately $104.7 million in cash; (ii) sold an aggregate of
6,977,700 shares of Toys Common Stock; and (iii) delivered 2,000,000 shares of
Toys Common Stock to Canadian Imperial Bank of Commerce ("CIBC") in exchange for
a cash payment of approximately $61.4 million. As a result of the foregoing
transactions, the Liquidating Trust no longer holds any shares of Toys Common
Stock.

     The Liquidating Trust was established pursuant to an Agreement and
Declaration of Trust, dated as of December 6, 1995, between Petrie and the
trustees named therein (the "Liquidating Trust Agreement"). Pursuant to the
Liquidating Trust Agreement, on January 22, 1996 (the "Succession Date"), Petrie
transferred its assets (then consisting of approximately $131 million in cash
and cash equivalents and 5,055,576 shares of Toys Common Stock) to, and its
remaining fixed and contingent liabilities were assumed by (the "Succession"),
the Liquidating Trust. Each holder of Petrie common stock, par value $1.00 per
share ("Petrie Common Stock"), as of the close of business on the Succession
Date, became the holder of one unit of beneficial interest in the Liquidating
Trust ("Unit of Beneficial Interest") for each share of Petrie Common Stock
owned by such shareholder. Certificates representing shares of Petrie Common
Stock were automatically deemed to represent a corresponding number of units of
beneficial interest.

     On November 19, 2002, the expiration date of the Liquidating Trust was
extended from December 6, 2002 to December 6, 2006 (subject to further extension
by the Liquidating Trustees).

     The Liquidating Trust's activities are limited to winding up Petrie's
affairs in furtherance of the Plan of Liquidation. The Liquidating Trust was
established to enable Petrie to liquidate prior to fully winding up its

                                        2
<PAGE>

affairs, in accordance with the terms of a private letter ruling received by
Petrie from the IRS on November 15, 1994. The Liquidating Trust Agreement
prohibits the Liquidating Trustees from entering into or engaging in any trade
or business on behalf of the Liquidating Trust or its unit holders and from
receiving any property, making any distribution, satisfying or discharging any
claims, expenses, charges, liabilities or obligations or otherwise taking any
action which, in any case, is inconsistent with Petrie's complete liquidation
(as such term is used in and interpreted under Sections 368(a)(1)(C) and
(a)(2)(G) of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations promulgated thereunder).

     The Liquidating Trust is a complete pass-through entity for federal income
tax purposes and, accordingly, is not subject to federal income tax. Instead,
each holder of units of beneficial interest in the Liquidating Trust is required
to take into account, in accordance with such holder's method of accounting, his
pro rata share of the Liquidating Trust's items of income, gain, loss, deduction
or credit, regardless of the amount or timing of distributions to such holder.

     The principal executive offices of the Liquidating Trust are located at 201
Route 17, Suite 300, Rutherford, New Jersey 07070 (telephone (201) 635-9637).

EMPLOYEES

     The Liquidating Trust has two part-time employees, Stephanie R. Joseph and
H. Bartlett Brown. Ms. Joseph serves as Manager and Chief Executive Officer of
the Liquidating Trust. Mr. Brown serves as Assistant Manager and Chief Financial
Officer of the Liquidating Trust.

ITEM 2. PROPERTIES

     Other than the Liquidating Trust's principal executive offices, the
Liquidating Trust neither owns nor leases any real property.

     As successor to Petrie, the Liquidating Trust is a guarantor of certain
leases for which Petrie Retail or an affiliate thereof has assumed liability.
See Item 7 and Notes to Financial Statements.

ITEM 3. LEGAL PROCEEDINGS

     None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not Applicable.

                                        3
<PAGE>

                                    PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SECURITY HOLDER
        MATTERS

UNITS OF BENEFICIAL INTEREST

     Since January 23, 1996, the Liquidating Trust's units of beneficial
interest have been quoted on the OTC Bulletin Board under the symbol "PSTLS."
The high and low closing prices per unit of beneficial interest are shown below:

<Table>
<Caption>
                                                              HIGH     LOW
                                                              -----   -----
<S>                                                           <C>     <C>
YEAR ENDED DECEMBER 31, 2001:
  First quarter (ended March 31, 2001)......................  $0.97   $0.94
  Second quarter (ended June 30, 2001)......................  $0.86   $0.78
  Third quarter (ended September 30, 2001)..................  $0.86   $0.80
  Fourth quarter (ended December 31, 2001)..................  $0.84   $0.81
YEAR ENDING DECEMBER 31, 2002:
  First quarter (ended March 31, 2002)......................  $0.89   $0.87
  Second quarter (ended June 30, 2002)......................  $0.90   $0.87
  Third quarter (ended September 30, 2002)..................  $0.94   $0.87
  Fourth quarter (ended December 31, 2002)..................  $1.03   $0.92
YEAR ENDING DECEMBER 31, 2003:
  First quarter (through March 26, 2003)....................  $1.14   $0.60
</Table>

     As of March 26, 2003, the most recent practicable date prior to the
printing of this report, there were approximately 2,404 holders of record of
units of beneficial interest of the Liquidating Trust. On January 31, 2003, the
Liquidating Trust distributed to its unit holders a total of $26,175,119 in
cash, or $0.50 for each unit of beneficial interest held of record at the close
of business on January 21, 2003. The Liquidating Trustees will consider
additional distributions of cash to unit holders when the status of the
Liquidating Trust's remaining contingent liabilities is further clarified.

     The Liquidating Trust does not have any compensation plans under which
equity securities are authorized for issuance.

                                        4
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

     Set forth below are selected consolidated financial data of the Liquidating
Trust as of and for the years ended December 31, 2002, 2001, 2000, 1999 and
1998. A liquidation basis of accounting was implemented for all years presented.

<Table>
<Caption>
                                                          YEAR ENDED DECEMBER 31,
                                             -------------------------------------------------
                                              2002     2001(2)   2000(3)   1999(4)    1998(5)
                                             -------   -------   -------   --------   --------
                                                  (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
<S>                                          <C>       <C>       <C>       <C>        <C>
Corporate overhead benefit (expense)(1)....  $(1,270)  $    94   $ 6,262   $ (2,259)  $ (3,710)
Investment income..........................    1,720     4,171     7,033      6,703      7,165
Net realized and unrealized (loss) on
  investments..............................       --        --    (4,327)    (2,215)   (31,367)
                                             -------   -------   -------   --------   --------
Net income (loss)..........................  $   450   $ 4,265   $ 8,968   $  2,229   $(27,912)
                                             =======   =======   =======   ========   ========
Income (loss) per unit:....................  $  0.01   $  0.08   $  0.17   $   0.04   $  (0.53)
                                             =======   =======   =======   ========   ========
Weighted average number of units...........   52,350    52,350    52,350     52,350     52,350
                                             =======   =======   =======   ========   ========
Total assets...............................  $88,916   $88,996   $86,344   $223,966   $225,524
                                             =======   =======   =======   ========   ========
</Table>

---------------

(1) Corporate overhead generally consists of costs and expenses related to the
    liquidation and dissolution of Petrie, including, but not limited to, legal
    fees, real estate advisory fees, insurance, salaries for the Liquidating
    Trust's two part-time employees, trustee fees, accounting fees, transfer
    agent fees and printing and related expenses.

(2) The benefit in corporate overhead for the year ended December 31, 2001
    reflects the receipt by the Liquidating Trust of approximately $1.5 million
    in December 2001 as partial payment of the Liquidating Trust's claim against
    the Petrie Retail bankruptcy estate.

(3) The benefit in corporate overhead for the year ended December 31, 2000
    reflects a reduction of $3.8 million in the Liquidating Trust's total
    accrual for lease liabilities following the settlement and release of claims
    asserted by certain landlords. By order of the Bankruptcy Court in Petrie
    Retail's bankruptcy dated April 12, 2000, the Liquidating Trust was released
    from its contractual liability with respect to the United Auto Workers
    District 65 Security Plan Pension Fund. Accordingly, the Liquidating Trust
    reversed a $3 million accrual related to this contingent liability.
    Additionally, on December 21, 2000, the Liquidating Trust received $765,000
    as partial payment of the Liquidating Trust's claim against the Petrie
    Retail bankruptcy estate.

(4) During the year ended December 31, 1999, corporate overhead included $2.0
    million relating to an accrual in respect of the settlement of the Aventura
    Malls Venture action against the Liquidating Trust, which amount was reduced
    by approximately $800,000 following the settlement and release of claims
    asserted by certain other landlords. During the year ended December 31,
    1999, corporate overhead also included professional fees and approximately
    $898,000 in income related to refunds received for retrospective insurance
    premiums, taxes paid on behalf of Petrie Retail and bankruptcy settlement
    payments.

(5) During the year ended December 31, 1998, the Liquidating Trust's total
    accrual for lease liabilities was reduced by approximately $2.0 million
    following the settlement and release of claims asserted by landlords, which
    reduction was offset by $2.3 million in accruals relating to other
    liabilities relating to Petrie Retail's bankruptcy.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The following discussion should be read in conjunction with the financial
statements and the notes thereto of the Liquidating Trust appearing elsewhere in
this report.

     As previously disclosed, Petrie sold its retail operations to PS Stores on
December 9, 1994, and on January 24, 1995 (the date on which Petrie's
shareholders approved the Plan of Liquidation), Petrie

                                        5
<PAGE>

commenced its liquidation. As a result, effective January 28, 1995, Petrie
changed its basis of accounting from a going-concern basis to a liquidation
basis. During all periods since such date, the Liquidating Trust's activities
have been limited to continuing Petrie's liquidation in furtherance of the Plan
of Liquidation. For financial statement purposes, the Liquidating Trust is
deemed to be the successor to Petrie, and the results of operations of Petrie
are presented in the financial statements of the Liquidating Trust. Beginning
with the period ended December 31, 1996, the Liquidating Trust adopted the
calendar year as its fiscal year.

CRITICAL ACCOUNTING POLICIES

     The Liquidating Trust's financial statements are prepared in accordance
with accounting practices generally accepted in the United States, and require
management to make estimates and assumptions. The Liquidating Trust believes
that, of its significant accounting policies, the policies described below under
"Liquidity and Capital Resources -- Contingent Liabilities" may involve a higher
degree of judgment and complexity.

RESULTS OF OPERATIONS

  YEAR ENDED DECEMBER 31, 2002 COMPARED TO THE YEAR ENDED DECEMBER 31, 2001

     The Liquidating Trust's net income for the year ended December 31, 2002 was
$450,000, as compared to net income of $4,265,000 for the year ended December
31, 2001.

     For the year ended December 31, 2002, the Liquidating Trust incurred
corporate overhead expense of $1,270,000, as compared to a benefit in corporate
overhead of $94,000 for the year ended December 31, 2001. The Liquidating
Trust's corporate overhead generally consists of costs and expenses related to
the liquidation and dissolution of Petrie, including, but not limited to, costs
and expenses that the Liquidating Trust incurred as a result of Petrie Retail's
failure to perform its obligations in connection with its bankruptcy filing,
legal fees, real estate advisory fees, salaries for the Liquidating Trust's two
part-time employees, trustee fees, accounting fees, transfer agent fees and
printing and related expenses. The benefit in corporate overhead for the year
ended December 31, 2001 reflects the receipt of approximately $1.5 million in
December 2001 as partial payment of the Liquidating Trust's claim against the
Petrie Retail bankruptcy estate. The amount of expenses that constituted
corporate overhead was marginally lower during the year ended December 31, 2002
than during the year ended December 31, 2001.

     During the year ended December 31, 2002, the Liquidating Trust earned
$1,720,000 in investment income, as compared to $4,171,000 earned during the
year ended December 31, 2001. The decrease in investment income earned during
the year ended December 31, 2002 is primarily due to lower prevailing interest
rates.

 YEAR ENDED DECEMBER 31, 2001 COMPARED TO THE YEAR ENDED DECEMBER 31, 2000

     The Liquidating Trust's net income for the year ended December 31, 2001 was
$4,265,000, as compared to net income of $8,968,000 for the year ended December
31, 2000.

     For the year ended December 31, 2001, the Liquidating Trust realized a
benefit in corporate overhead of $94,000, as compared to a benefit of $6,262,000
for the year ended December 31, 2000. The Liquidating Trust's corporate overhead
generally consists of costs and expenses related to the liquidation and
dissolution of Petrie, including, but not limited to, costs and expenses that
the Liquidating Trust incurred as a result of Petrie Retail's failure to perform
its obligations in connection with its bankruptcy filing, legal fees, real
estate advisory fees, salaries for the Liquidating Trust's two part-time
employees, trustee fees, accounting fees, transfer agent fees and printing and
related expenses. The benefit in corporate overhead for the year ended December
31, 2001 reflects the receipt of approximately $1.5 million in December 2001 as
partial payment of the Liquidating Trust's claim against the Petrie Retail
bankruptcy estate. The benefit in corporate overhead for the year ended December
31, 2000 reflects a reduction of $3.8 million in the Liquidating Trust's total
accrual for lease liabilities following the settlement and release of claims
asserted by certain landlords. By order of the Bankruptcy Court in Petrie
Retail's bankruptcy dated April 12, 2000, the Liquidating Trust was

                                        6
<PAGE>

released from its contractual liability with respect to the United Auto Workers
District 65 Security Plan Pension Fund (the "Multiemployer Plan"). Accordingly,
the Liquidating Trust reversed a $3 million accrual related to this contingent
liability. Additionally, on December 21, 2000, the Liquidating Trust received
$765,000 as partial payment of the Liquidating Trust's claim against the Petrie
Retail bankruptcy estate.

     During the year ended December 31, 2001, the Liquidating Trust earned
$4,171,000 in investment income, as compared to $7,033,000 earned during the
year ended December 31, 2000. The decrease in investment income earned during
the year ended December 31, 2001 is primarily due to lower prevailing interest
rates.

     During the year ended December 31, 2000, the Liquidating Trust distributed
to its unit holders all of its remaining 1,688,576 shares of Toys Common Stock.
The Liquidating Trust recorded a net realized loss of $4,327,000 for the year
ended December 31, 2000 in connection with the February 11, 2000 distribution of
the Toys Common Stock. The Liquidating Trust did not own any shares of Toys
Common Stock during the year ended December 31, 2001.

LIQUIDITY AND CAPITAL RESOURCES

  GENERAL

     The assets of the Liquidating Trust are subject to the terms of a letter
agreement dated as of January 24, 1995 (the "Side Letter Agreement"), pursuant
to which the Liquidating Trust is required to provide notice to Toys "R" Us (and
an opportunity for Toys "R" Us to object) prior to making any future liquidating
distributions. Such notice was provided to Toy "R" Us in connection with the
Liquidating Trust's distribution on January 31, 2003 of $26,175,119 and in
connection with prior distributions. Pursuant to the terms of the Side Letter
Agreement, the Liquidating Trust is required to provide similar notice to Toys
"R" Us prior to making any additional distributions.

     As of March 26, 2003, the Liquidating Trust had approximately $63 million
in cash, cash equivalents and investments in U.S. Treasury obligations. The
Liquidating Trust believes that it has sufficient liquid funds available to
satisfy the foreseeable liabilities of the Liquidating Trust (including, without
limitation, costs and expenses related to the administration of the Liquidating
Trust such as legal fees, real estate advisory fees, insurance, salaries for the
Liquidating Trust's two part-time employees, trustee fees, accounting fees,
transfer agent fees and printing and related expenses).

     On November 19, 2002, the expiration date of the Liquidating Trust was
extended from December 6, 2002 to December 6, 2006 (subject to further extension
by the Liquidating Trustees).

  CONTINGENT LIABILITIES

     As successor to Petrie, the Liquidating Trust has accrued for certain
contingent liabilities with respect to existing or potential claims, lawsuits
and other proceedings, which primarily relate to guarantees of certain retail
store leases, expiring at various times through 2011 for which Petrie Retail or
an affiliate thereof assumed liability, and certain other liabilities that were
assumed by Petrie Retail (but as to which Petrie's liability has not been
released) in connection with the Sale (collectively, the "Assumed Obligations")
to the extent that Petrie Retail or its successor fails to perform. The
Liquidating Trust accrues such liabilities when it is probable that future costs
will be incurred and when such costs can be reasonably estimated. Such accruals
are based on developments to date, the Liquidating Trust's estimates of the
outcome of these matters and its experience (including that of its predecessor,
Petrie) in contesting, litigating and settling matters. At December 31, 2002 and
December 31, 2001, the Liquidating Trust had accrued approximately $25 million
and $26 million, respectively, for the aforementioned contingent liabilities. As
the scope of these liabilities becomes further refined, there may be changes in
the estimates of future costs, which could have a material effect on the
Liquidating Trust's financial condition, liquidity and future ability to make
liquidating distributions.

     Petrie Retail's Bankruptcy.  On October 12, 1995, Petrie Retail filed a
voluntary petition for reorganization relief under Chapter 11 of the United
States Bankruptcy Code with the U.S. Bankruptcy Court for the

                                        7
<PAGE>

Southern District of New York (the "Bankruptcy Court"). In connection with its
filing for bankruptcy protection, Petrie Retail failed to perform or make
payments with respect to certain of the Assumed Obligations, including, but not
limited to, Assumed Obligations relating to store leases for which Petrie Retail
or an affiliate thereof had assumed liability, state and federal taxes,
employment agreements, insurance premiums and certain other claims and
contractual obligations. Accordingly, the Liquidating Trust has been and may
continue to be required to make payments in respect of certain of the Assumed
Obligations.

     On December 23, 1997, the Liquidating Trust filed over 110 claims in the
Bankruptcy Court against Petrie Retail and certain of its affiliates with
respect to an aggregate of approximately $14 million in payments which had then
been made by the Liquidating Trust as a result of the failure by Petrie Retail
or an affiliate thereof to perform or pay certain of the Assumed Obligations.
The Liquidating Trust subsequently amended these claims such that it asserted
fixed claims representing a total of approximately $16.9 million against Petrie
Retail's estate. The Liquidating Trust also filed approximately 600 additional
claims in the Bankruptcy Court against Petrie Retail and certain of its
affiliates with respect to payments which the Liquidating Trust may in the
future be required to make as a result of the failure by Petrie Retail or its
affiliates to perform or pay Assumed Obligations.

     On December 8, 1998, the Bankruptcy Court confirmed a plan of
reorganization for Petrie Retail (the "Petrie Retail Plan"), which modified the
plan of reorganization filed by Petrie Retail and Warburg Pincus Ventures, L.P.
("Warburg") with the Bankruptcy Court on August 6, 1998, as amended. Under the
confirmed Petrie Retail Plan, Petrie Retail sold substantially all of its
remaining operating assets to Urban Acquisition Corp., an affiliate of Urban
Brands, Inc., a retailer that operates under the Ashley Stewart trade name, for
$52.25 million, and retained 13 of its store leases, for which Warburg was
required to contribute $12 million to the bankruptcy estate, assume $3.1 million
of Petrie Retail's executive severance obligations and waive approximately $3.8
million in fees and expenses allegedly owed to it under Petrie Retail's
debtor-in-possession financing arrangement.

     On April 12, 2000, the Bankruptcy Court approved a stipulation of
settlement between the distribution company (the "Distribution Company")
designated by the Petrie Retail Plan and the Liquidating Trust, under which the
Liquidating Trust and the Distribution Company settled their disputes regarding
the claims that the Liquidating Trust filed against Petrie Retail. Pursuant to
the stipulation of settlement, (i) the Liquidating Trust was allowed a single
unsecured claim against Petrie Retail in the amount of approximately $14.4
million, subject to increase upon resolution of the Distribution Company's
objections to certain landlord claims against Petrie Retail, (ii) the
Distribution Company agreed to release to the Liquidating Trust approximately
$5.5 million held in a collateral account by June 30, 2000 (provided that the
Distribution Company did not pay $10 million or more to the Multiemployer Plan
prior to that date), and (iii) the Distribution Company and the Liquidating
Trust exchanged mutual releases. On June 28, 2000, the approximately $5.5
million held in the collateral account was released and transferred to the
Liquidating Trust in accordance with the settlement. On December 15, 2000, the
Bankruptcy Court entered an order allowing the Liquidating Trust an unsecured
claim against the Distribution Company in the amount of $15.3 million. On
December 21, 2000, the Liquidating Trust received $765,000 as partial payment of
its claim against the Distribution Company. In December 2001, the Liquidating
Trust received an additional $1,530,000 as partial payment of the Liquidating
Trust's claims against the Distribution Company. As of March 26, 2003, the
Liquidating Trust's remaining claim against the Distribution Company was
$13,005,000. There can be no assurance as to the timing of the payment of the
remainder of the Liquidating Trust's claim against the Distribution Company or
the amount of any further payments that the Distribution Company will make to
creditors asserting unsecured claims. Accordingly, no amounts have been accrued
as receivables for potential reimbursement or recoveries from the reorganized
Petrie Retail entity.

     On April 10, 1998, PS Stores, the parent of Petrie Retail, filed a
voluntary petition for reorganization relief under Chapter 11 of the United
States Bankruptcy Code with the Bankruptcy Court. After such filing, the
Liquidating Trust filed claims in the Bankruptcy Court against PS Stores
substantially similar to those filed against Petrie Retail. On December 8, 1998,
the Bankruptcy Court confirmed PS Stores' proposed plan of reorganization, and
in August 1999, pursuant to a settlement approved by the Bankruptcy Court, the

                                        8
<PAGE>

Liquidating Trust received a payment in the amount of approximately $200,000
from PS Stores' bankruptcy estate.

     Store Leases.  As described above, in December 1998, Petrie Retail disposed
of substantially all its remaining operations and store leases as part of the
Petrie Retail Plan. Of the roughly 1600 stores that Petrie Retail operated prior
to filing its bankruptcy petition in October 1995, (i) 722 leases were rejected,
(ii) 615 leases were assigned to third party retailers, including (A) 410 leases
which were part of Petrie Retail's former G&G Shops Inc. division and were
included in the sale of such division to an investor group led by Pegasus
Partners, L.P. and certain executives of such division, (B) 85 leases which were
sold to Urban Acquisition Corp. as part of the Petrie Retail Plan and (C) 120
leases which were not part of Petrie Retail's former G&G Shops Inc. division and
which were sold to third party retailers other than Urban Acquisition Corp.,
(iii) 13 leases were retained by the reorganized Petrie Retail entity for stores
which are currently managed by Urban Acquisition Corp. and which Urban
Acquisition Corp. has the right to purchase at a later date and (iv)
approximately 250 leases expired or were terminated by mutual landlord and
tenant consent. In addition, an affiliate of the Liquidating Trust's real estate
advisor assumed Petrie Retail's former headquarters lease at 150 Meadowlands
Parkway in Secaucus, New Jersey, which lease was guaranteed by the Liquidating
Trust. The headquarters lease expired on October 31, 2002.

     After taking into account settlements and releases obtained from landlords,
the Liquidating Trust, as successor to Petrie, remains the guarantor of 140 of
the retail leases. The Liquidating Trust's theoretical exposure relating to
these leases, without giving effect to any present value discount and assuming
the landlord in each case is unable to mitigate its damages, would be
approximately $29 million (including potential exposure related to the exercise
of lease renewal options described below). Such exposure includes (i)
approximately $24 million in potential liability related to 61 of the rejected
store leases described above, which amount is included in the Liquidating
Trust's accrued expenses and other liabilities at December 31, 2002, and (ii)
approximately $5 million in potential liability related to 27 of the store
leases which were either assigned to third party retailers or are still held by
the successor of Petrie Retail and 52 of the leases which have expired or were
terminated by mutual landlord and tenant consent described above. The exposure
related to assigned leases or leases still held by the successor to Petrie
Retail includes potential liability related to lease extension options that may
be exercised following the assignment of leases to third party retailers.

     The Liquidating Trust's lease exposure calculations reflect the estimated
sum of all base rent and additional rent (such as taxes and common area charges)
due under a lease through the end of the current lease term, but do not reflect
potential penalties, interest and other charges to which a landlord may be
entitled. Such additional charges (which may in part be unenforceable) are not
expected to materially increase the Liquidating Trust's lease guarantee
liability.

     A significant number of leases discussed above under which a landlord might
claim that the Liquidating Trust, as successor to Petrie, has liability as a
lease guarantor either expressly contain mitigation provisions or relate to
property in states that imply such provisions as a matter of law. Mitigation
generally requires, among other things, that a landlord of a closed store seek
to reduce its damages, including by attempting to locate a new tenant.

     Employment Agreements.  As previously disclosed, on October 23, 1995,
Petrie Retail notified three former executives of Petrie that, as a result of
Petrie Retail's bankruptcy filing, Petrie Retail would no longer honor its
obligations under the employment agreements each executive had entered into with
Petrie which had been assumed by Petrie Retail in connection with the sale of
the retail operations. On April 25, 1996, the Liquidating Trust entered into
settlement agreements with two of the former executives and on January 27, 1997
entered into a settlement agreement with the estate of the third executive.
Pursuant to such settlement agreements, the Liquidating Trust agreed to pay each
substantially all the amounts due under respective agreements with Petrie. In
early 2002, one of the executives died and, as a result, the Liquidating Trust's
obligations under the settlement agreement with such executive terminated. The
total cost of the settlements to the Liquidating Trust was approximately $3.2
million, of which approximately $182,000 (relating to certain unfunded pension
obligations) remained unpaid and was included in the Liquidating Trust's accrued
expenses and other liabilities at December 31, 2002.

                                        9
<PAGE>

     Insurance Premium Adjustment.  In April 2002, the Liquidating Trust
received a bill from Zurich Insurance Company ("Zurich"), an insurer of Petrie,
for $551,338 in respect of retrospective premium adjustments purportedly owed by
Petrie pursuant to insurance agreements between Zurich and Petrie. The amount
claimed by Zurich relates to policy terms 1988/1989 through and including
1994/1995, and was based on the value of claims made as of December 31, 2001.
Such amount was paid by the Liquidating Trust on September 26, 2002.

     The Liquidating Trust believes, based on the most recently available
information, that appropriate accruals have been established in the accompanying
financial statements to provide for any losses that may be incurred with respect
to the aforementioned contingencies.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

     Except for historical matters, the matters discussed in this Form 10-K are
forward-looking statements that involve risks and uncertainties. Forward-looking
statements include, but are not limited to, statements relating to the
Liquidating Trust's contingent liabilities contained above in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
Notes to Financial Statements.

     The Liquidating Trust wishes to caution readers that in addition to factors
that may be described elsewhere in this Form 10-K, the following important
factors, among others, could cause the Liquidating Trust's assets and
liabilities to differ materially from those expressed in any forward-looking
statements made by, or on behalf of, the Liquidating Trust, and could materially
affect the Liquidating Trust's financial condition, liquidity and future ability
to make liquidating distributions:

     (1)  A decision by Petrie Retail's successor to close additional stores for
which the Liquidating Trust, as successor to Petrie, has liability as a
guarantor;

     (2)  Other actions by Petrie Retail's successor which cause the default of
obligations assumed by Petrie Retail in connection with the Sale for which the
Liquidating Trust, as successor to Petrie, may be deemed to have liability;

     (3)  A decision by a court that the Liquidating Trust, as successor to
Petrie, has liability as a guarantor of certain leases notwithstanding Petrie's
receipt from the landlords thereof of releases of guarantees with respect to
such leases;

     (4)  An adverse material change in general economic conditions and the
interest rate environment;

     (5)  The effects of, and changes in, laws and regulations and other
activities of federal and local governments, agencies and similar organizations;
and

     (6)  The costs and other effects of other legal and administrative cases
and proceedings, settlements and claims relating to the Liquidating Trust's
contingent liabilities.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Liquidating Trust invests its available cash in short-term United
States Treasury Obligations. Although the rate of interest paid on short-term
United States Treasury Obligations may fluctuate over time based on changes in
the general level of U.S. interest rates, each of such investments is made at a
fixed interest rate over the duration of the investment and each has a maturity
of less than 365 days. In addition, the Liquidating Trust Agreement prohibits
the Liquidating Trust from making certain investments with a maturity of greater
than one year and certain other investments that could expose the Liquidating
Trust to market risk. The Liquidating Trust believes that its exposure to market
risk fluctuations for its investments is not material as of December 31, 2002.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     See pages F-1 through F-9 annexed hereto.

                                        10
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

LIQUIDATING TRUSTEES AND EXECUTIVE OFFICERS

     The following table shows, as of March 26, 2003, the Liquidating Trustees
and the Liquidating Trust's executive officers, their respective ages, the year
each person became a Liquidating Trustee or officer of the Liquidating Trust and
all positions currently held with the Liquidating Trust by each such person:

<Table>
<Caption>
                                              TRUSTEE OR
NAME                                   AGE   OFFICER SINCE   POSITION WITH THE LIQUIDATING TRUST
----                                   ---   -------------   -----------------------------------
<S>                                    <C>   <C>             <C>
Stephanie R. Joseph..................  56        1995        Manager and Chief Executive Officer;
                                                               Liquidating Trustee
H. Bartlett Brown....................  67        1995        Assistant Manager and Chief
                                                             Financial Officer
Joseph H. Flom.......................  79        1995        Liquidating Trustee
Bernard Petrie.......................  77        1995        Liquidating Trustee
Laurence A. Tisch....................  80        1995        Liquidating Trustee
Raymond S. Troubh....................  76        1995        Chairman of the Board of the
                                                               Liquidating Trustees
</Table>

     Biographical information concerning the Liquidating Trustees and the
Liquidating Trust's executive officers is provided below.

     Stephanie R. Joseph became Secretary and Principal Legal Officer of Petrie
in February 1995 and Manager, Chief Executive Officer and Liquidating Trustee of
the Liquidating Trust in December 1995. She is the founder and President of The
Directors' Network Inc., a corporate consulting firm that prepares directors for
their boardroom responsibilities, since March 1994. From May 1984 until June
1992, she was employed as the Associate General Counsel of American Express
Company.

     H.  Bartlett Brown became Treasurer, Chief Financial Officer and Principal
Accounting Officer of Petrie in February 1995 and Assistant Manager and Chief
Financial Officer of the Liquidating Trust in December 1995. Mr. Brown is a tax
consultant. He was a partner in Ernst & Young LLP, an accounting firm, from
October 1970 until September 1994.

     Joseph H. Flom became a Liquidating Trustee in December 1995. He has been a
partner in Skadden, Arps, Slate, Meagher & Flom LLP, a law firm and counsel to
Petrie, the Liquidating Trust and the Estate of Milton Petrie, for more than the
past five years. Mr. Flom is Chairman of the Board of Trustees of the Woodrow
Wilson International Center for Scholars; a director of United Way of New York
City; a director of the American-Israel Friendship League; and a trustee of the
New York University Medical Center.

     Bernard Petrie became both a director of Petrie and a Liquidating Trustee
in December 1995. He is an attorney and has been self-employed for more than the
past five years.

     Laurence A. Tisch became a Liquidating Trustee in December 1995. Since
January 1999, Mr. Tisch has been the Co-Chairman of the Board of Loews
Corporation, a diversified holding company. From October 1994 to January 1999,
Mr. Tisch was the Co-Chairman and Co-Chief Executive Officer of Loews
Corporation. From May 1960 to October 1994, Mr. Tisch was the Chairman of the
Board and Chief Executive Officer of Loews Corporation. Since March 1990, he has
also been the Chief Executive Officer and a director of CNA Financial Corp., an
insurance and financial services company and a publicly-held subsidiary of Loews
Corporation. From January 1987 to November 1995, Mr. Tisch was Chairman of the
Board, President and Chief Executive Officer of CBS Inc., a television and radio
network. Mr. Tisch is a director of Loews

                                        11
<PAGE>

Corporation; a director of Automatic Data Processing, Inc., a provider of
payroll and other data processing services; a director of Bulova Corporation, a
watch manufacturer and a publicly-held subsidiary of Loews Corporation; a
director of Federated Department Stores, Inc., an operator of department stores;
a trustee of the New York Public Library; a trustee of the Metropolitan Museum
of Art; and a director of United Jewish Appeal.

     Raymond S. Troubh became a Liquidating Trustee and Chairman of the Board of
Liquidating Trustees in December 1995. Mr. Troubh served as Treasurer of Petrie
from December 9, 1994 to February 7, 1995. He is a financial consultant, a
former governor of the American Stock Exchange and a former general partner of
Lazard Freres & Co., an investment banking firm. Mr. Troubh is a director of
ARIAD Pharmaceuticals, Inc., a pharmaceutical company; Diamond Offshore
Drilling, Inc., an offshore drilling company; Enron Corp., an energy trading
company (of which he serves as non-executive Chairman of the Board); General
American Investors Company, an investment and advisory company; Gentiva Health
Services, Inc., a healthcare company; Hercules Incorporated, a speciality
chemical company; Triarc Companies, Inc., a diversified holding company; and WHX
Corporation, a holding company.

MEETINGS AND STANDING COMMITTEES

     The Liquidating Trustees met two times during the year ended December 31,
2002. During such period, the Liquidating Trustees had no standing committees.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Exchange Act requires the Liquidating Trust's trustees
and executive officers, and persons who own more than ten percent of the
Liquidating Trust's units of beneficial interest, to file with the Securities
and Exchange Commission certain reports of ownership and changes in ownership of
the units of beneficial interest, and to furnish the Liquidating Trust with
copies of all Section 16(a) forms they file. To the Liquidating Trust's
knowledge, based solely on a review of the copies of such reports furnished to
the Liquidating Trust, for the year ended December 31, 2002, all Section 16(a)
filing requirements applicable to its executive officers, directors and greater
than ten percent stockholders were complied with.

ITEM 11. EXECUTIVE COMPENSATION

GENERAL

     The following table sets forth the total annual compensation paid by the
Liquidating Trust to its Manager and Chief Executive Officer, who is the only
executive officer of the Liquidating Trust whose compensation exceeded $100,000:

                           SUMMARY COMPENSATION TABLE

<Table>
<Caption>
                                                       ANNUAL COMPENSATION
                                                   ---------------------------
                                                     YEAR                           ALL OTHER
NAME AND PRINCIPAL POSITION                         ENDED      SALARY    BONUS   COMPENSATION(1)
---------------------------                        --------   --------   -----   ---------------
<S>                                                <C>        <C>        <C>     <C>
Stephanie R. Joseph..............................  12/31/02   $130,000     --        $45,000
  Manager, Chief Executive Officer                 12/31/01    130,000     --         45,000
  and Liquidating Trustee                          12/31/00    130,000     --         45,000
</Table>

---------------

(1) Ms. Joseph receives $45,000 per year for her service as a Liquidating
    Trustee.

COMPENSATION OF LIQUIDATING TRUSTEES

     Liquidating Trustees are compensated for their service as Liquidating
Trustees in the amount of $30,000 per fiscal year, with the exception of Raymond
S. Troubh and Stephanie R. Joseph, who are each compensated $45,000 per fiscal
year for their service as Liquidating Trustees.

                                        12
<PAGE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     During the year ended December 31, 2002, the Liquidating Trustees did not
have a compensation committee, and each of the Liquidating Trustees other than
Stephanie R. Joseph participated in deliberations of the Liquidating Trustees
concerning executive officer compensation. During the year ended December 31,
2002, no executive officer of the Liquidating Trust served as a member of the
compensation committee (or other board committee performing equivalent
functions, or in the absence of any such committee, the entire board of
directors) of another entity, one of whose executive officers served as a
Liquidating Trustee.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED SECURITY HOLDER MATTERS

UNITS OF BENEFICIAL INTEREST

     The following table sets forth certain information with respect to (i) the
only persons who, to the best knowledge of the Liquidating Trust, are the
beneficial owners of more than five percent of the outstanding units of
beneficial interest of the Liquidating Trust and (ii) the number of units of
beneficial interest of the Liquidating Trust owned by each of the Liquidating
Trustees, the officers of the Liquidating Trust and the Liquidating Trustees and
officers as a group.

<Table>
<Caption>
                                                                TOTAL NUMBER OF
                                                              UNITS OF BENEFICIAL          PERCENT OF
                                                             INTEREST BENEFICIALLY        OUTSTANDING
NAME OF BENEFICIAL OWNER                                             OWNED            BENEFICIAL INTERESTS
------------------------                                     ----------------------   --------------------
<S>                                                          <C>                      <C>
The Estate of Milton Petrie(1).............................        28,111,274                 53.7%
  Four Times Square
  New York, New York 10036-6522
HBK Investments L.P. and HBK Finance L.P.(2)...............         9,518,600                 18.2%
  777 Main Street, Suite 2750
  Fort Worth, Texas 76102
Franklin Resources, Inc., Charles Johnson, Rupert Johnson,
  Jr. and Fiduciary Trust Company International(3).........         5,449,550                 10.0%
  One Franklin Parkway
  San Mateo, California 94403
T. Rowe Price Associates, Inc.(4)..........................         4,715,200                  9.0%
  100 E. Pratt Street
  Baltimore, Maryland 21202
H. Bartlett Brown..........................................                --                   --
Joseph H. Flom(1)..........................................                --                   --
Stephanie R. Joseph........................................                --                   --
Bernard Petrie(1)..........................................            34,500                    *
Laurence A. Tisch(1).......................................             1,000                    *
Raymond S. Troubh..........................................                --                   --
All managers and Liquidating Trustees as a group (6
  individuals, including those named above)................            35,500                    *
</Table>

---------------

* Less than one percent of the outstanding units of beneficial interest.

(1) Based on information contained in the Statement on Schedule 13D filed by the
    Estate of Milton Petrie (the "Estate") with the Securities and Exchange
    Commission on January 31, 1996. Mr. Flom, Hilda K. Gerstein, Jerome A.
    Manning, Bernard Petrie, Carroll Petrie, Mr. Tisch and David Zack serve as
    the executors of the Estate. The executors of the Estate share equally the
    power to dispose of, and to vote, the units of beneficial interest held by
    the Estate. Messrs. Flom, Petrie and Tisch disclaim beneficial ownership of
    the units of beneficial interest held by the Estate.

                                        13
<PAGE>

(2) Based on information contained in Amendment No. 4 to the Statement on
    Schedule 13G filed by HBK Investments L.P. and HBK Finance L.P. with the
    Securities and Exchange Commission on February 7, 2003.

(3) Based on information contained in the Statement on Schedule 13G filed by
    Franklin Resources, Inc., Charles B. Johnson, Rupert H. Johnson, Jr. and
    Fiduciary Trust Company International on July 10, 2002. The securities are
    beneficially owned by one or more open or closed-end investment companies or
    other managed accounts which are advised by direct and indirect investment
    advisory subsidiaries of Franklin Resources, Inc.

(4) Based on information contained in Amendment No. 7 to the Statement on
    Schedule 13G filed by T. Rowe Price Associates, Inc. ("Price Associates")
    with the Securities and Exchange Commission on February 14, 2003. These
    securities are owned by various individual and institutional investors which
    Price Associates serves as investment adviser with power to direct
    investments and sole power to vote the securities. For purposes of the
    reporting requirements of the Securities Exchange Act of 1934, as amended,
    Price Associates is deemed to be a beneficial owner of such securities.
    Price Associates has, however, expressly disclaimed that it is, in fact, the
    beneficial owner of such securities.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Skadden, Arps, Slate, Meagher & Flom LLP serves as legal counsel to the
Liquidating Trust and the Estate of Milton Petrie, which owns approximately
53.7% of the Liquidating Trust's outstanding units of beneficial interest, and
has provided services to each during the year ended December 31, 2002. Joseph H.
Flom, a Liquidating Trustee and an executor of the Estate of Milton Petrie, is a
partner in Skadden, Arps, Slate, Meagher & Flom LLP.

     The Liquidating Trust maintains directors' and officers' liability
insurance provided by Continental Casualty Company, an affiliate of CNA
Financial Corp. Laurence A. Tisch, a Liquidating Trustee and an executor of the
Estate of Milton Petrie, is Chairman of the Board of CNA Financial Corp.

     Messrs. Flom, Petrie and Tisch are executors of the Estate of Milton Petrie
and are entitled to executors' commissions. Mr. Petrie is also a beneficiary of
the Estate of Milton Petrie.

ITEM 14. CONTROLS AND PROCEDURES

     (a)  Evaluation of Disclosure Controls and Procedures. The Liquidating
Trust's Chief Executive Officer and Chief Financial Officer have evaluated the
effectiveness of the Liquidating Trust's disclosure controls and procedures (as
such term is defined in Rules 13a-14(c) and 15d-14(c) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as of a date within 90
days prior to the filing date of this annual report (the "Evaluation Date").
Based on such evaluation, such officers have concluded that, as of the
Evaluation Date, the Liquidating Trust's disclosure controls and procedures are
effective in alerting them on a timely basis to material information relating to
the Liquidating Trust required to be included in the Liquidating Trust's reports
filed or submitted under the Exchange Act.

     (b)  Changes in Internal Controls. Since the Evaluation Date, there have
not been any significant changes in the Liquidating Trust's internal controls or
in other factors that could significantly affect such controls.

                                        14
<PAGE>

                                    PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)(1),(2) LIST OF FINANCIAL STATEMENTS.

     See Index to Financial Statements at page F-1.

     (a)(3) LIST OF EXHIBITS.

<Table>
<C>    <S>
 2.1   Plan of Liquidation and Dissolution of Petrie (incorporated
       herein by reference to Exhibit 2.2 to the Liquidating
       Trust's Registration Statement on Form 8-B, filed with the
       Securities and Exchange Commission on December 19, 1995).
 3.1   Agreement and Declaration of Trust, dated as of December 6,
       1995, by and between Petrie and Joseph H. Flom, Stephanie R.
       Joseph, Bernard Petrie, Laurence A. Tisch and Raymond S.
       Troubh, as trustees (incorporated herein by reference to
       Exhibit 3.1 to the Liquidating Trust's Registration
       Statement on Form 8-B, filed with the Securities and
       Exchange Commission on December 19, 1995).
10.1   Acquisition Agreement, dated as of April 20, 1994, between
       Petrie and Toys "R" Us (incorporated herein by reference to
       Annex B to Petrie's Proxy Statement, dated as of November 3,
       1994).
10.2   Amendment No. 1 to the Acquisition Agreement, dated as of
       May 10, 1994, between Petrie and Toys "R" Us (incorporated
       by reference to Annex B to Petrie's Proxy Statement, dated
       as of November 3, 1994).
10.3   Stock Purchase Agreement, dated as of August 23, 1994,
       between Petrie and WP Investors (incorporated herein by
       reference to Annex A to Petrie's Proxy Statement, dated as
       of November 3, 1994).
10.4   Amendment No. 1 to the Stock Purchase Agreement, dated as of
       December 9, 1994, among WP Investors, PS Stores and Petrie
       (incorporated herein by reference to Annex A to Petrie's
       Proxy Statement, dated as of November 3, 1994).
10.5   Assignment and Assumption Agreement, dated as of December 9,
       1994, between Petrie and Petrie Retail (agreements of a
       substantially similar nature were entered into between
       Petrie and the following affiliates of Petrie Retail on or
       about December 9,1994: Franklin 203 Corporation, G&G Shops
       of North Carolina, Inc., Hartfield Stores, Inc., Whitney
       Stores, Inc, Marianne Clearwater Corporation, Davids
       Woodbridge, Inc. and Jean Nicole, Inc.) (incorporated herein
       by reference to Exhibit 10.5 to the Liquidating Trust's
       Annual Report on Form 10-K for the period ended January 22,
       1996).
10.6   Cross-Indemnification and Procedure Agreement, dated as of
       December 9, 1994, between PS Stores and Petrie (incorporated
       herein by reference to Exhibit 10.5 to Petrie's Annual
       Report on Form 10-K for the fiscal year ended January 28,
       1995).
10.7   Buyer Indemnification Agreement, dated as of December 9,
       1994, among Toys "R" Us, Petrie, PS Stores, Petrie Retail
       and all subsidiaries of PS Stores (incorporated herein by
       reference to Exhibit 10.6 to Petrie's Annual Report on Form
       10-K for the fiscal year ended January 28, 1995).
10.8   Seller Indemnification Agreement, dated as of December 9,
       1994, among Toys "R" Us, Petrie, PS Stores, Petrie Retail
       and all subsidiaries of PS Stores (incorporated herein by
       reference to Exhibit 10.7 to Petrie's Annual Report on Form
       10-K for the fiscal year ended January 28, 1995).
10.9   Side Letter Agreement, dated as of January 24, 1995, between
       Petrie and Toys "R" Us (incorporated herein by reference to
       Exhibit 10.3 to Petrie's Current Report on Form 8-K, dated
       as of January 24, 1995).
99.1   Certificate of Chief Executive Officer and Chief Financial
       Officer pursuant to 18 U.S.C. Section 1350, as adopted
       pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
</Table>

     (b)  Reports on Form 8-K.

     Current Report on Form 8-K dated November 19, 2002 (extending the term of
the Liquidating Trust).

                                        15
<PAGE>

     Current Report on Form 8-K dated January 8, 2003 (reporting liquidating
distribution of $26,175,119 in cash to unit holders of the Liquidating Trust).

     (c) See Item 14(a)(3) above. The Liquidating Trust will furnish to any
holder of units of beneficial interest of the Liquidating Trust, upon written
request, any exhibit listed in response to Item 14(a)(3) upon payment by such
holder of the Liquidating Trust's reasonable expenses in furnishing any such
exhibit.

     (d) See Item 14(a)(2) above.

                                        16
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                          PETRIE STORES LIQUIDATING TRUST

                                          By:    /s/ STEPHANIE R. JOSEPH
                                            ------------------------------------
                                                    Stephanie R. Joseph
                                            Manager and Chief Executive Officer

Dated: March 31, 2003

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.

Dated: March 31, 2003

                                          By:     /s/ H. BARTLETT BROWN
                                            ------------------------------------
                                                     H. Bartlett Brown
                                             Assistant Manager, Chief Financial
                                                           Officer
                                              and Principal Accounting Officer

                                          By:    /s/ STEPHANIE R. JOSEPH
                                            ------------------------------------
                                                    Stephanie R. Joseph
                                              Manager, Chief Executive Officer
                                                        and Trustee

                                          By:      /s/ JOSEPH H. FLOM
                                            ------------------------------------
                                                       Joseph H. Flom
                                                          Trustee

                                          By:      /s/ BERNARD PETRIE
                                            ------------------------------------
                                                       Bernard Petrie
                                                          Trustee

                                          By:     /s/ LAURENCE A. TISCH
                                            ------------------------------------
                                                     Laurence A. Tisch
                                                          Trustee

                                          By:     /s/ RAYMOND S. TROUBH
                                            ------------------------------------
                                                     Raymond S. Troubh
                                                          Trustee

                                        17
<PAGE>

                        PETRIE STORES LIQUIDATING TRUST

                         INDEX TO FINANCIAL STATEMENTS

<Table>
<S>                                                           <C>
FINANCIAL STATEMENTS
  Report of Independent Auditors............................  F-2

  Statements of Net Assets in Liquidation -- December 31,
     2002 and December 31, 2001.............................  F-3

  Statements of Changes in Net Assets in Liquidation -- For
     the years ended December 31, 2002, 2001 and 2000.......  F-4

  Notes to Financial Statements.............................  F-5
</Table>

                                       F-1
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

Board of Trustees and Holders of Units of Beneficial Interest
Petrie Stores Liquidating Trust

     We have audited the accompanying statements of net assets in liquidation of
the Petrie Stores Liquidating Trust (successor to Petrie Stores Corporation and
its former subsidiaries) as of December 31, 2002 and December 31, 2001, and the
related statements of changes in net assets in liquidation for each of the three
years in the period ended December 31, 2002. These financial statements are the
responsibility of the management of the Petrie Stores Liquidating Trust. Our
responsibility is to express an opinion on these financial statements based on
our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets in liquidation of the Petrie Stores
Liquidating Trust (successor to Petrie Stores Corporation and its former
subsidiaries) as of December 31, 2002 and December 31, 2001 and the changes in
net assets in liquidation for each of the three years in the period ended
December 31, 2002, in conformity with accounting principles generally accepted
in the United States.

                                          ERNST & YOUNG LLP

MetroPark, New Jersey
March 14, 2003

                                       F-2
<PAGE>

                        PETRIE STORES LIQUIDATING TRUST
                    (SUCCESSOR TO PETRIE STORES CORPORATION)

                    STATEMENTS OF NET ASSETS IN LIQUIDATION

<Table>
<Caption>
                                                              DECEMBER 31,   DECEMBER 31,
                                                                  2002           2001
                                                              ------------   ------------
                                                                    (IN THOUSANDS)
<S>                                                           <C>            <C>
                                         ASSETS
Cash and cash equivalents...................................    $     9        $   406
U.S. Treasury Obligations...................................     88,907         88,590
                                                                -------        -------
  Total assets..............................................     88,916         88,996

                                       LIABILITIES

Accrued expenses and other liabilities......................     25,920         26,450
Commitments and contingencies
                                                                -------        -------
Net assets in liquidation...................................    $62,996        $62,546
                                                                =======        =======
</Table>

                            See accompanying notes.
                                       F-3
<PAGE>

                        PETRIE STORES LIQUIDATING TRUST
                    (SUCCESSOR TO PETRIE STORES CORPORATION)

               STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION

<Table>
<Caption>
                                                           YEAR ENDED     YEAR ENDED     YEAR ENDED
                                                          DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                                                              2002           2001           2000
                                                          ------------   ------------   ------------
                                                           (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
<S>                                                       <C>            <C>            <C>
Net assets in liquidation at beginning of year..........    $62,546        $58,281        $186,942
                                                            -------        -------        --------
Investment income.......................................      1,720          4,171           7,033
Corporate overhead benefit (expense)....................     (1,270)            94           6,262
Net realized and unrealized (loss) on investments.......         --             --          (4,327)
                                                            -------        -------        --------
Net income for the year.................................        450          4,265           8,968
                                                            -------        -------        --------
Liquidating distributions (consisting of cash and
  1,688,576 shares of Toys "R" Us common stock valued at
  $11.75 per share).....................................         --             --        (137,629)
                                                            -------        -------        --------
Net assets in liquidation at end of year................    $62,996        $62,546        $ 58,281
                                                            =======        =======        ========
Net income per unit.....................................    $  0.01        $  0.08        $   0.17
                                                            =======        =======        ========
Weighted average number of units........................     52,350         52,350          52,350
                                                            =======        =======        ========
</Table>

                            See accompanying notes.
                                       F-4
<PAGE>

                        PETRIE STORES LIQUIDATING TRUST
                    (SUCCESSOR TO PETRIE STORES CORPORATION)

                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2002

1.  BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  BASIS OF PRESENTATION

     The Petrie Stores Liquidating Trust (the "Liquidating Trust") is the
successor to Petrie Stores Corporation ("Petrie"). Prior to December 9, 1994,
Petrie operated a chain of retail stores that specialized in women's apparel and
were located throughout the United States (including Puerto Rico and the U.S.
Virgin Islands). At Petrie's Annual Meeting, held on December 6, 1994, Petrie's
shareholders approved the sale of Petrie's retail operations (the "Sale"). At
Petrie's Reconvened Annual Meeting, held on January 24, 1995, Petrie's
shareholders approved (i) an exchange of shares of Toys "R" Us, Inc. ("Toys 'R'
Us") common stock ("Toys Common Stock") with Toys "R" Us (Note 2) and (ii) the
liquidation and dissolution of Petrie pursuant to a plan of liquidation and
dissolution (the "Plan of Liquidation").

     Pursuant to the Plan of Liquidation and the Agreement and Declaration of
Trust, dated as of December 6, 1995 (the "Liquidating Trust Agreement"), between
Petrie and the trustees named therein (the "Liquidating Trustees"), effective as
of the close of business on January 22, 1996 (the "Succession Date"), Petrie
transferred its remaining assets (then consisting of approximately $131 million
in cash and cash equivalents and 5,055,576 shares of Toys Common Stock) to, and
its remaining fixed and contingent liabilities were assumed by (the
"Succession"), the Liquidating Trust. The assets of the Liquidating Trust are
subject to various contingent liabilities, the status of which is presently
unclear (Note 4), as well as the terms of a letter agreement with Toys "R" Us
(Note 2) pursuant to which the Liquidating Trust is required to provide notice
to Toys "R" Us prior to making any future liquidating distributions.

     On November 19, 2002, the expiration date of the Liquidating Trust was
extended from December 6, 2002 to December 6, 2006 (subject to further extension
by the Liquidating Trustees).

     Beginning with the period ended December 31, 1996, the Liquidating Trust
has adopted the calendar year as its fiscal year. A liquidation basis of
accounting was implemented as of January 28, 1995. The statements of net assets
in liquidation at December 31, 2002 and December 31, 2001 do not distinguish
between current and long-term balances as would be reflected if such statements
had been prepared on a going-concern basis.

  CASH EQUIVALENTS

     Cash equivalents consist of highly liquid investments of less than 90 days'
maturity from the date of purchase. These investments are carried at cost plus
accrued interest, which approximates fair market value.

  INVESTMENTS IN U.S. TREASURY OBLIGATIONS

     Investments in U.S. Treasury obligations are carried at fair market value
(which approximates cost) and unrealized gains or losses thereon are recognized
in the statement of changes in net assets in liquidation.

  INCOME TAXES

     The Liquidating Trust is a complete pass-through entity for federal income
tax purposes and, accordingly, is not itself subject to federal income tax.
Instead, for federal income tax purposes, each Petrie shareholder (i) is deemed
to have received on the Succession Date, and therefore own, a pro rata share of
the assets transferred by Petrie to the Liquidating Trust, subject to a pro rata
share of Petrie's liabilities assumed by the Liquidating Trust, and (ii) is
subject to the same federal income tax consequences with respect to the receipt,
ownership or disposition of such assets as if such shareholder had directly
received, owned or disposed of such assets, subject to such liabilities.

                                       F-5
<PAGE>
                        PETRIE STORES LIQUIDATING TRUST
                    (SUCCESSOR TO PETRIE STORES CORPORATION)

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

  EARNINGS PER UNIT

     Earnings per unit have been computed based on the weighted average number
of units outstanding. Since there are no dilutive securities outstanding for any
of the periods presented, basic and diluted earnings per unit are the same.

  CONCENTRATION OF CREDIT RISK

     Certain financial instruments potentially subject the Liquidating Trust to
concentrations of credit risk. These financial instruments consist primarily of
temporary cash investments and U.S. Treasury obligations. The Liquidating Trust
places its temporary cash investments with high credit quality financial
institutions to limit its credit exposure.

  USE OF ESTIMATES

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

2.  INVESTMENTS IN COMMON STOCK

     Prior to February 12, 2000, the Liquidating Trust had investments in the
common stock of Toys "R" Us, which operates a chain of specialty retail stores
principally engaged in the sale of toys and children's clothing in the United
States and abroad.

     At December 31, 2002 and 2001, the Liquidating Trust did not own any shares
of Toys Common Stock.

3.  LIQUIDATING DISTRIBUTIONS

     On February 11, 2000, the Liquidating Trust distributed a total of
$78,525,357 in cash and 1,688,576 shares of Toys "R" Us common stock with a fair
market value of $19,840,768.

     On December 21, 2000, the Liquidating Trust distributed to its unit holders
a total of $39,262,679 in cash. In the distribution, unit holders received $0.75
in cash for each unit of beneficial interest held at record at the close of
business on December 11, 2000.

     The assets of the Liquidating Trust are subject to the terms of a letter
agreement, dated as of January 24, 1995, pursuant to which the Liquidating Trust
is required to provide notice to Toys "R" Us (and an opportunity for Toys "R" Us
to object) prior to making any future liquidating distributions.

4.  COMMITMENTS AND CONTINGENCIES

     As successor to Petrie, the Liquidating Trust has accrued for certain
contingent liabilities with respect to existing or potential claims, lawsuits
and other proceedings, which primarily relate to guarantees of certain retail
store leases, expiring at various times through 2011 for which Petrie Retail or
an affiliate thereof assumed liability, and certain other liabilities that were
assumed by Petrie Retail (but as to which Petrie's liability has not been
released) in connection with the Sale (collectively, the "Assumed Obligations")
to the extent that Petrie Retail or its successor fails to perform. The
Liquidating Trust accrues such liabilities when it is probable that future costs
will be incurred and when such costs can be reasonably estimated. Such accruals
are based on developments to date, the Liquidating Trust's estimates of the
outcome of these matters and its experience (including that of its predecessor,
Petrie) in contesting, litigating and settling matters. At December 31, 2002 and
December 31, 2001, the Liquidating Trust had accrued approximately $25 million
and $26 million, respectively, for the aforementioned contingent liabilities. As
the scope of these liabilities becomes further refined, there may be changes in
the estimates of future costs, which could have a material effect on the
Liquidating Trust's financial condition, liquidity and future ability to make
liquidating distributions.

                                       F-6
<PAGE>
                        PETRIE STORES LIQUIDATING TRUST
                    (SUCCESSOR TO PETRIE STORES CORPORATION)

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

     Petrie Retail's Bankruptcy.  On October 12, 1995, Petrie Retail filed a
voluntary petition for reorganization relief under Chapter 11 of the United
States Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District
of New York (the "Bankruptcy Court"). In connection with its filing for
bankruptcy protection, Petrie Retail failed to perform or make payments with
respect to certain of the Assumed Obligations, including, but not limited to,
Assumed Obligations relating to store leases for which Petrie Retail or an
affiliate thereof had assumed liability, state and federal taxes, employment
agreements, insurance premiums and certain other claims and contractual
obligations. Accordingly, the Liquidating Trust has been and may continue to be
required to make payments in respect of certain of the Assumed Obligations.

     On December 23, 1997, the Liquidating Trust filed over 110 claims in the
Bankruptcy Court against Petrie Retail and certain of its affiliates with
respect to an aggregate of approximately $14 million in payments which had then
been made by the Liquidating Trust as a result of the failure by Petrie Retail
or an affiliate thereof to perform or pay certain of the Assumed Obligations.
The Liquidating Trust subsequently amended these claims such that it asserted
fixed claims representing a total of approximately $16.9 million against Petrie
Retail's estate. The Liquidating Trust also filed approximately 600 additional
claims in the Bankruptcy Court against Petrie Retail and certain of its
affiliates with respect to payments which the Liquidating Trust may in the
future be required to make as a result of the failure by Petrie Retail or its
affiliates to perform or pay Assumed Obligations.

     On December 8, 1998, the Bankruptcy Court confirmed a plan of
reorganization for Petrie Retail (the "Petrie Retail Plan"), which modified the
plan of reorganization filed by Petrie Retail and Warburg Pincus Ventures, L.P.
("Warburg") with the Bankruptcy Court on August 6, 1998, as amended. Under the
confirmed Petrie Retail Plan, Petrie Retail sold substantially all of its
remaining operating assets to Urban Acquisition Corp., an affiliate of Urban
Brands, Inc., a retailer that operates under the Ashley Stewart trade name, for
$52.25 million, and retained 13 of its store leases, for which Warburg was
required to contribute $12 million to the bankruptcy estate, assume $3.1 million
of Petrie Retail's executive severance obligations and waive approximately $3.8
million in fees and expenses allegedly owed to it under Petrie Retail's
debtor-in-possession financing arrangement.

     On April 12, 2000, the Bankruptcy Court approved a stipulation of
settlement between the distribution company (the "Distribution Company")
designated by the Petrie Retail Plan and the Liquidating Trust, under which the
Liquidating Trust and the Distribution Company settled their disputes regarding
the claims that the Liquidating Trust filed against Petrie Retail. Pursuant to
the stipulation of settlement, (i) the Liquidating Trust was allowed a single
unsecured claim against Petrie Retail in the amount of approximately $14.4
million, subject to increase upon resolution of the Distribution Company's
objections to certain landlord claims against Petrie Retail, (ii) the
Distribution Company agreed to release to the Liquidating Trust approximately
$5.5 million held in a collateral account by June 30, 2000 (provided that the
Distribution Company did not pay $10 million or more to the United Auto Workers
District 65 Security Plan Pension Fund (the "Multiemployer Plan") prior to that
date), and (iii) the Distribution Company and the Liquidating Trust exchanged
mutual releases. On June 28, 2000, the approximately $5.5 million held in the
collateral account was released and transferred to the Liquidating Trust in
accordance with the settlement. On December 15, 2000, the Bankruptcy Court
entered an order allowing the Liquidating Trust an unsecured claim against the
Distribution Company in the amount of $15.3 million. On December 21, 2000, the
Liquidating Trust received $765,000 as partial payment of the Liquidating
Trust's claim against the Distribution Company. In December 2001, the
Liquidating Trust received an additional $1,530,000 as partial payment of the
Liquidating Trust's claims against the Distribution Company. As of March 26,
2003, the Liquidating Trust's remaining claim against the Distribution Company
was $13,005,000. There can be no assurance as to the timing of the payment of
the remainder of the Liquidating Trust's claim against the Distribution Company
or the amount of any further payments that the Distribution Company will make to

                                       F-7
<PAGE>
                        PETRIE STORES LIQUIDATING TRUST
                    (SUCCESSOR TO PETRIE STORES CORPORATION)

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

creditors asserting unsecured claims. Accordingly, no amounts have been accrued
as receivables for potential reimbursement or recoveries from the reorganized
Petrie Retail entity.

     On April 10, 1998, PS Stores, the parent of Petrie Retail, filed a
voluntary petition for reorganization relief under Chapter 11 of the United
States Bankruptcy Code with the Bankruptcy Court. After such filing, the
Liquidating Trust filed claims in the Bankruptcy Court against PS Stores
substantially similar to those filed against Petrie Retail. On December 8, 1998,
the Bankruptcy Court confirmed PS Stores' proposed plan of reorganization, and
in August 1999, pursuant to a settlement approved by the Bankruptcy Court, the
Liquidating Trust received a payment in the amount of approximately $200,000
from PS Stores' bankruptcy estate.

     Store Leases.  As described above, in December 1998, Petrie Retail disposed
of substantially all its remaining operations and store leases as part of the
Petrie Retail Plan. Of the roughly 1600 stores that Petrie Retail operated prior
to filing its bankruptcy petition in October 1995, (i) 722 leases were rejected,
(ii) 615 leases were assigned to third party retailers, including (A) 410 leases
which were part of Petrie Retail's former G&G Shops Inc. division and were
included in the sale of such division to an investor group led by Pegasus
Partners, L.P. and certain executives of such division, (B) 85 leases which were
sold to Urban Acquisition Corp. as part of the Petrie Retail Plan and (C) 120
leases which were not part of Petrie Retail's former G&G Shops Inc. division and
which were sold to third party retailers other than Urban Acquisition Corp.,
(iii) 13 leases were retained by the reorganized Petrie Retail entity for stores
which are currently managed by Urban Acquisition Corp. and which Urban
Acquisition Corp. has the right to purchase at a later date and (iv)
approximately 250 leases expired or were terminated by mutual landlord and
tenant consent. In addition, an affiliate of the Liquidating Trust's real estate
advisor assumed Petrie Retail's former headquarters lease at 150 Meadowlands
Parkway in Secaucus, New Jersey, which lease was guaranteed by the Liquidating
Trust. The headquarters lease expired on October 31, 2002.

     After taking into account settlements and releases obtained from landlords,
the Liquidating Trust, as successor to Petrie, remains the guarantor of 140 of
the retail leases. The Liquidating Trust's theoretical exposure relating to
these leases, without giving effect to any present value discount and assuming
the landlord in each case is unable to mitigate its damages, would be
approximately $29 million (including potential exposure related to the exercise
of lease renewal options described below). Such exposure includes (i)
approximately $24 million in potential liability related to 61 of the rejected
store leases described above, which amount is included in the Liquidating
Trust's accrued expenses and other liabilities at December 31, 2002, and (ii)
approximately $5 million in potential liability related to 27 of the store
leases which were either assigned to third party retailers or are still held by
the successor of Petrie Retail, and 52 of the leases which have expired or were
terminated by mutual landlord and tenant consent described above. The exposure
related to assigned leases or leases still held by the successor to Petrie
Retail includes potential liability related to lease extension options that may
be exercised following the assignment of leases to third party retailers.

     The Liquidating Trust's lease exposure calculations reflect the estimated
sum of all base rent and additional rent (such as taxes and common area charges)
due under a lease through the end of the lease term, but do not reflect
potential penalties, interest and other charges to which a landlord may be
entitled. Such additional charges (which may in part be unenforceable) are not
expected to materially increase the Liquidating Trust's lease guarantee
liability.

     A significant number of leases discussed above under which a landlord might
claim that the Liquidating Trust, as successor to Petrie, has liability as a
lease guarantor either expressly contain mitigation provisions or relate to
property in states that imply such provisions as a matter of law. Mitigation
generally requires, among other things, that a landlord of a closed store seek
to reduce its damages, including by attempting to locate a new tenant.

                                       F-8
<PAGE>
                        PETRIE STORES LIQUIDATING TRUST
                    (SUCCESSOR TO PETRIE STORES CORPORATION)

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

     Employment Agreements.  As previously disclosed, on October 23, 1995,
Petrie Retail notified three former executives of Petrie that, as a result of
Petrie Retail's bankruptcy filing, Petrie Retail would no longer honor its
obligations under the employment agreements each executive had entered into with
Petrie which had been assumed by Petrie Retail in connection with the sale of
the retail operations. On April 25, 1996, the Liquidating Trust entered into
settlement agreements with two of the former executives and on January 27, 1997
entered into a settlement agreement with the estate of the third executive.
Pursuant to such settlement agreements, the Liquidating Trust agreed to pay each
substantially all the amounts due under respective agreements with Petrie. In
early 2002, one of the two executives died and, as a result, the Liquidating
Trust's obligations under the settlement agreement with such executive
terminated. The total cost of the settlements to the Liquidating Trust was
approximately $3.2 million, of which approximately $182,000 (relating to certain
unfunded pension obligations) remained unpaid and was included in the
Liquidating Trust's accrued expenses and other liabilities at December 31, 2002.

     Insurance Premium Adjustment.  In April 2002, the Liquidating Trust
received a bill from Zurich Insurance Company ("Zurich"), an insurer of Petrie,
for $551,338 in respect of retrospective premium adjustments purportedly owned
by Petrie pursuant to insurance agreements between Zurich and Petrie. The amount
claim by Zurich relates to policy terms 1988/1989 through and including
1994/1995, and was based on the value of claims made as of December 31, 2001.
Such amount was paid by the Liquidating Trust on September 26, 2002.

     The Liquidating Trust believes, based on the most recently available
information, that appropriate accruals have been established in the accompanying
financial statements to provide for any losses that may be incurred with respect
to the aforementioned contingencies.

5.  QUARTERLY FINANCIAL DATA (UNAUDITED)

     Summarized quarterly financial data for the years ended December 31, 2002
and December 31, 2001 are as follows:

<Table>
<Caption>
                                                                       QUARTER
                                                       ---------------------------------------
                                                        FIRST     SECOND     THIRD     FOURTH
                                                       -------   --------   -------   --------
                                                       (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
<S>                                                    <C>       <C>        <C>       <C>
YEAR ENDED DECEMBER 31, 2002:
  Net income (loss)..................................   $ 273      $ 157     $  88     $  (68)
                                                        =====      =====     =====     ======
  Net income per unit................................   $0.01      $0.00     $0.00     $ 0.00
                                                        =====      =====     =====     ======
YEAR ENDED DECEMBER 31, 2001:
  Net income.........................................   $ 904      $ 624     $ 796     $1,941(1)
                                                        =====      =====     =====     ======
  Net income per unit................................   $0.02      $0.01     $0.02     $ 0.04
                                                        =====      =====     =====     ======
</Table>

---------------

(1) In December 2001, the Liquidating Trust received $1,530,000 as partial
    settlement of the Liquidating Trust's claim against the Petrie Retail
    bankruptcy estate.

6.  SUBSEQUENT EVENTS

     On January 31, 2003, the Liquidating Trust made a distribution to its unit
holders in the amount of $0.50 in cash for each unit of beneficial interest held
of record at the close of business on January 21, 2003. There were 52.35 million
units outstanding on January 21, 2003 and the total distribution amounted to
approximately $26.2 million.

                                       F-9
<PAGE>

                                 CERTIFICATIONS

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
         PURSUANT TO RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934
                   AS ADOPTED PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002

I, Stephanie R. Joseph, Chief Executive Officer of Petrie Stores Liquidating
Trust, certify that:

     1. I have reviewed this annual report on Form 10-K of Petrie Stores
Liquidating Trust;

     2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          (a)  designed such disclosure controls and procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this annual report is being
     prepared;

          (b)  evaluated the effectiveness of the registrant's disclosure
     controls and procedures as of a date within 90 days prior to the filing
     date of this annual report (the "Evaluation Date"); and

          (c)  presented in this annual report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent functions):

          (a)  all significant deficiencies in the design or operation of
     internal controls which could adversely affect the registrant's ability to
     record, process, summarize and report financial data and have identified
     for the registrant's auditors any material weaknesses in internal controls;
     and

          (b)  any fraud, whether or not material, that involves management or
     other employees who have a significant role in the registrant's internal
     controls; and

     6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

                                                /s/ STEPHANIE R. JOSEPH
                                          --------------------------------------
                                                   Stephanie R. Joseph
                                                 Chief Executive Officer

Date: March 31, 2003
<PAGE>

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
         PURSUANT TO RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934
                   AS ADOPTED PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002

I, H. Bartlett Brown, Chief Financial Officer of Petrie Stores Liquidating
Trust, certify that:

     1. I have reviewed this annual report on Form 10-K of Petrie Stores
Liquidating Trust;

     2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          (a)  designed such disclosure controls and procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this annual report is being
     prepared;

          (b)  evaluated the effectiveness of the registrant's disclosure
     controls and procedures as of a date within 90 days prior to the filing
     date of this annual report (the "Evaluation Date"); and

          (c)  presented in this annual report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent functions):

          (a)  all significant deficiencies in the design or operation of
     internal controls which could adversely affect the registrant's ability to
     record, process, summarize and report financial data and have identified
     for the registrant's auditors any material weaknesses in internal controls;
     and

          (b)  any fraud, whether or not material, that involves management or
     other employees who have a significant role in the registrant's internal
     controls; and

     6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

                                                 /s/ H. BARTLETT BROWN
                                          --------------------------------------
                                                    H. Bartlett Brown
                                                 Chief Financial Officer

Date: March 31, 2003