<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, 2003

                         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

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

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

                          UNITS OF BENEFICIAL INTEREST
                                (Title of Class)

     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.  [ ]

     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 25, 2004, 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 30, 2003, 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 $15.3 million, based upon the
closing price of $0.63 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. and T. Rowe Price
Associates, Inc. are not affiliates of the Liquidating Trust.

                      DOCUMENTS INCORPORATED BY REFERENCE:

     None.
<PAGE>

                                     INDEX

<Table>
<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
          Security Holder Matters.....................................    4
Item 6.   Selected Financial Data.....................................    5
Item 7.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations...................................    5
Item 7A.  Quantitative and Qualitative Disclosures About Market
          Risk........................................................   11
Item 8.   Financial Statements and Supplementary Data.................   11
Item 9.   Changes in and Disagreements with Accountants on Accounting
          and Financial Disclosure....................................   11
Item 9A.  Controls and Procedures.....................................   11

                                 PART III
Item 10.  Directors and Executive Officers of the Registrant..........   12
Item 11.  Executive Compensation......................................   14
Item 12.  Security Ownership of Certain Beneficial Owners and
          Management and Related Security Holder Matters..............   15
Item 13.  Certain Relationships and Related Transactions..............   16
Item 14.  Principal Accountant Fees and Services......................   16

                                  PART IV
Item 15.  Exhibits, Financial Statement Schedules and Reports on Form
          8-K.........................................................   17
</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 six 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 $125.6 million in cash (including, most recently,
the distribution of approximately $21 million on January 30, 2004); (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 Ending December 31, 2002:
  First quarter (ended March 31, 2002)......................  $0.89   $0.85
  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 (ended March 31, 2003)......................  $1.14   $0.60
  Second quarter (ended June 30, 2003)......................  $0.65   $0.61
  Third quarter (ended September 30, 2003)..................  $0.65   $0.62
  Fourth quarter (ended December 31, 2003)..................  $0.66   $0.64
Year Ending December 31, 2004:
  First quarter (through March 25, 2004)....................  $0.86   $0.42
</Table>

     As of March 25, 2004, the most recent practicable date prior to the
printing of this report, there were approximately 2,300 holders of record of
units of beneficial interest of the Liquidating Trust. On January 30, 2004, the
Liquidating Trust distributed to its unit holders a total of $20,940,095 in
cash, or $0.40 for each unit of beneficial interest held of record at the close
of business on January 20, 2004. 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.

EQUITY COMPENSATION PLAN INFORMATION

     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, 2003, 2002, 2001, 2000 and
1999. A liquidation basis of accounting was implemented for all years presented.

<Table>
<Caption>
                                                  YEAR ENDED DECEMBER 31,
                                      ------------------------------------------------
                                      2003(2)    2002     2001(3)   2000(4)   1999(5)
                                      -------   -------   -------   -------   --------
                                          (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
<S>                                   <C>       <C>       <C>       <C>       <C>
Corporate overhead benefit
  (expense)(1)......................  $ 2,002   $(1,270)  $    94   $ 6,262   $ (2,259)
Investment income...................      736     1,720     4,171     7,033      6,703
Net realized and unrealized (loss)
  on investments....................       --        --        --    (4,327)    (2,215)
                                      -------   -------   -------   -------   --------
Net income..........................  $ 2,738   $   450   $ 4,265   $ 8,968   $  2,229
                                      =======   =======   =======   =======   ========
Income per unit:....................  $  0.05   $  0.01   $  0.08   $  0.17   $   0.04
                                      =======   =======   =======   =======   ========
Weighted average number of units....   52,350    52,350    52,350    52,350     52,350
                                      =======   =======   =======   =======   ========
Total assets........................  $65,154   $88,916   $88,996   $86,344   $223,966
                                      =======   =======   =======   =======   ========
</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, 2003,
    reflects the receipt of approximately $1.8 million on or about July 1, 2003,
    as partial payment of the Liquidating Trust's claim against the Petrie
    Retail bankruptcy estate, and the receipt of approximately $949,000 on or
    about December 30, 2003, of a refund in respect of previous tax years to
    which the Liquidating Trust is entitled pursuant to a settlement agreement
    between the Liquidating Trust and the Petrie Retail bankruptcy estate.

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

(4) 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, during the year ended December 31, 2000, the Liquidating Trust
    received $765,000 as partial payment of the Liquidating Trust's claim
    against the Petrie Retail bankruptcy estate.

(5) 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.

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.

                                        5
<PAGE>

     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 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.

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, 2003 Compared to the Year Ended December 31, 2002

     The Liquidating Trust's net income for the year ended December 31, 2003 was
$2,738,000, as compared to net income of $450,000 for the year ended December
31, 2002.

     For the year ended December 31, 2003, the Liquidating Trust realized a
benefit in corporate overhead of $2,002,000, as compared to an expense of
$1,270,000 for the year ended December 31, 2002. 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 amount of expenses that constituted corporate
overhead was lower during the year ended December 31, 2003 than during the year
ended December 31, 2002 due to lower ongoing expenses and fewer payments made in
settlements of claims made against the Liquidating Trust. The benefit in
corporate overhead for the year ended December 31, 2003 reflects the receipt of
$1,836,000, on or about July 1, 2003, as partial payment of the Liquidating
Trust's claim against the Petrie Retail bankruptcy estate, and the receipt of
approximately $949,000 on or about December 30, 2003, of a refund in respect of
previous tax years to which the Liquidating Trust is entitled pursuant to a
settlement agreement between the Liquidating Trust and the Petrie Retail
bankruptcy estate.

     During the year ended December 31, 2003, the Liquidating Trust earned
$736,000 in investment income, as compared to $1,720,000 earned during the year
ended December 31, 2002. The decrease in investment income earned during the
year ended December 31, 2003 is due to lower prevailing interest rates and fewer
assets available for investment.

  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 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.

                                        6
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

  GENERAL

     Pursuant to an agreement dated as of December 24, 2003, the Liquidating
Trust and Toys "R" Us agreed to terminate the Liquidating Trust's obligations
under a letter agreement dated as of January 24, 1995 to provide notice to Toys
"R" Us (and an opportunity for Toys "R" Us to object) prior to making any
liquidating distributions. Accordingly, the Liquidating Trust is no longer
obligated to provide notice to Toys "R" Us prior to making distributions.

     As of December 31, 2003, the Liquidating Trust had approximately $65
million in cash, cash equivalents and investments in U.S. Treasury obligations.
On January 30, 2004, the Liquidating Trust distributed to its unit holders a
total of $20,940,095 in cash. As of March 25, 2004, the Liquidating Trust had
approximately $44 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).

  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 both December 31,
2003 and December 31, 2002, the Liquidating Trust had accrued approximately $25
million 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 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

                                        7
<PAGE>

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. On December 18, 2001, the
Liquidating Trust received $1,530,000 as partial payment of the Liquidating
Trust's claim against the Distribution Company. On or about July 1, 2003, the
Liquidating Trust received an additional $1,836,000 as partial payment of the
Liquidating Trust's claim against the Distribution Company. As of March 25,
2004, the Liquidating Trust's remaining claim against the Distribution Company
was $11,169,000. There can be no assurance as to the timing of the payment, if
any, 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 or about December 30, 2003, the Liquidating Trust received a refund in
respect of previous tax years of approximately $949,000 to which the Liquidating
Trust is entitled pursuant to a settlement agreement between the Liquidating
Trust and the Petrie Retail bankruptcy estate.

     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.
                                        8
<PAGE>

     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 $27 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, 2003, and (ii)
approximately $3 million in potential liability related to 26 of the store
leases which were either assigned to third party retailers or are still held by
the successor of Petrie Retail and 53 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. The
two former executives have since died and, as a result, the Liquidating Trust's
obligations under the settlement agreements with such executives have been
terminated. The total cost of these settlements to the Liquidating Trust was
approximately $3.2 million.

     Insurance Premium Adjustment.  In April 2002, the Liquidating Trust
received a bill from Zurich N.A. ("Zurich"), an insurer of Petrie, for $551,338
in respect of retrospective premium adjustments purportedly owed by Petrie
pursuant to general liability, automobile and workers' compensation 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 has received a bill dated February 10, 2004 from
Zurich for $84,343 in respect of retrospective premium adjustments purportedly
owed by Petrie pursuant to general liability, automobile and workers'
compensation 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, 2003. This amount is
included in accrued expenses and other liabilities at December 31, 2003.

     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.

                                        9
<PAGE>

OFF-BALANCE SHEET ARRANGEMENTS

     The Liquidating Trust did not have any off-balance sheet arrangements
during the year ended December 31, 2003.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

     Information relating to the Liquidating Trust's significant contractual
obligations is summarized below.

<Table>
<Caption>
                                                       PAYMENT DUE BY PERIOD
                                      -------------------------------------------------------
                                              LESS THAN 1                           MORE THAN
CONTRACTUAL OBLIGATIONS               TOTAL      YEAR       1-3 YEARS   3-5 YEARS    5 YEARS
-----------------------               -----   -----------   ---------   ---------   ---------
<S>                                   <C>     <C>           <C>         <C>         <C>
Long-Term Debt Obligations..........    --         --           --          --          --
Capital Lease Obligations...........    --         --           --          --          --
Operating Lease Obligations(1)......    --         --           --          --          --
Purchase Obligations................    --         --           --          --          --
Other Long-Term Liabilities
  Reflected on the Registrant's
  Balance Sheet under GAAP(2).......    --         --           --          --          --
Total...............................    --         --           --          --          --
</Table>

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

(1) The Liquidating Trust leases its principal executive office on a
    month-to-month basis. Payments are equal to approximately $1,100 per month.

(2) As discussed under "Contingent Liabilities -- Store Leases," the Liquidating
    Trust has a theoretical exposure relating to retail leases for which Petrie
    Retail or an affiliate thereof assumed liability, to the extent that Petrie
    Retail or its successor fails to perform. Without giving effect to any
    present value discount and assuming the landlord in each case is unable to
    mitigate its damages, such exposure amounts to approximately $27 million
    (including potential exposure related to the exercise of lease renewal
    options). The Liquidating Trust has accrued for $24 million of this
    liability. Because of the uncertainty of when the Liquidating Trust may be
    called upon to satisfy these obligations, it is not presently determinable
    when payments in respect of these obligations would be made.

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;

                                        10
<PAGE>

     (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, 2003.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     See pages F-1 through F-10 annexed hereto.

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

     None.

ITEM 9A.  CONTROLS AND PROCEDURES.

     (a) Evaluation of Disclosure Controls and Procedures. The Liquidating
         Trust's Manager and Chief Executive Officer and Assistant Manager 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 periodic filings 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.

                                        11
<PAGE>

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

  LIQUIDATING TRUSTEES AND EXECUTIVE OFFICERS

     The following table shows, as of March 25, 2004, 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.......................  57        1995        Manager and Chief Executive
                                                                  Officer; Liquidating Trustee
H. Bartlett Brown.........................  68        1995        Assistant Manager and Chief
                                                                  Financial Officer
Joseph H. Flom............................  80        1995        Liquidating Trustee
Bernard Petrie............................  78        1995        Liquidating Trustee
Raymond S. Troubh.........................  77        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 , the Estate of Milton Petrie, and The Carroll and
Milton Petrie Foundation 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.

     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
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; Triarc Companies, Inc., a
diversified holding company; and WHX Corporation, a holding company.

                                        12
<PAGE>

FINANCIAL EXPERT

     The Liquidating Trustees have determined that Mr. Raymond S. Troubh is a
"financial expert," as such term is defined in Item 401 of Securities and
Exchange Commission Regulation S-K. Mr. Troubh is independent, as that term is
defined in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of
1934.

MEETINGS AND STANDING COMMITTEES

     The Liquidating Trustees met twice during the year ended December 31, 2003.
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, 2003, all Section 16(a)
filing requirements applicable to its executive officers, trustees and holders
of more than ten percent of the Liquidating Trust's units of beneficial interest
were complied with, except that (i) The Carroll and Milton Petrie Foundation's
Initial Statement of Beneficial Ownership of Securities on Form 3, reporting the
acquisition of 53.7% of the Liquidating Trust's outstanding units of beneficial
interest on November 12, 2003, was inadvertently filed late, on November 24,
2003, and (ii) The Estate of Milton Petrie's Statement of Changes in Beneficial
Ownership on Form 4, reporting the disposition of 53.7% of the Liquidating
Trust's outstanding units of beneficial interest on November 12, 2003, was
inadvertently filed late, on November 24, 2003.

CODE OF ETHICS

     The Liquidating Trust has adopted a code of ethics that applies to its
Manager and Chief Executive Officer and its Assistant Manager and Chief
Financial Officer. A copy of such code of ethics, which has been filed with the
Securities and Exchange Commission as Exhibit 14.1 to this Annual Report on Form
10-K, may be obtained by any person without charge, upon written request to the
Liquidating Trust at its principal executive office.

REDUCTION IN NUMBER OF LIQUIDATING TRUSTEES

     In accordance with the terms of the Liquidating Trust Agreement, following
the death of Lawrence A. Tisch, who served as a Liquidating Trustee from 1995
until 2003, the Liquidating Trustees determined to reduce the number of
Liquidating Trustees from five to four.

                                        13
<PAGE>

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.....................  12/31/03   $130,000     --        $45,000
  Manager, Chief Executive Officer        12/31/02    130,000     --         45,000
  and Liquidating Trustee                 12/31/01    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.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     During the year ended December 31, 2003, 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,
2003, no executive officer of the Liquidating Trust served as a director of or
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.

                                        14
<PAGE>

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

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

     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 INTEREST        PERCENT OF
                                                          BENEFICIALLY           OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER                          OWNED          BENEFICIAL INTERESTS
------------------------------------                   -------------------   --------------------
<S>                                                    <C>                   <C>
The Carroll and Milton Petrie Foundation(1)
  Four Times Square
  New York, New York 10036-6522......................      28,111,274                53.7%
HBK Investments L.P. and HBK Finance L.P.(2)
  777 Main Street, Suite 2750
  Fort Worth, Texas 76102............................       9,518,600                18.2%
T. Rowe Price Associates, Inc.(3)
  100 E. Pratt Street
  Baltimore, Maryland 21202..........................       4,715,200                 9.0%
H. Bartlett Brown....................................              --                  --
Joseph H. Flom(4)....................................              --                  --
Stephanie R. Joseph..................................              --                  --
Bernard Petrie(4)....................................          34,800                   *
Raymond S. Troubh....................................              --                  --
All managers and Liquidating Trustees as a group (5
  individuals, including those named above)..........          34,800                   *
</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
    Carroll and Milton Petrie Foundation with the Securities and Exchange
    Commission on November 24, 2003.

(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 Amendment No. 8 to the Statement on
    Schedule 13G filed by T. Rowe Price Associates, Inc. ("Price Associates")
    with the Securities and Exchange Commission on February 13, 2004. 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.

(4) Based on information contained in the Statement on Schedule 13D filed by The
    Carroll and Milton Petrie Foundation (the "Foundation") with the Securities
    and Exchange Commission on November 24, 2003, the Foundation is the
    beneficial owner of 28,111,274 units of beneficial interest. Mr. Joseph
    Flom, Mr. Jerome A. Manning, Mr. Bernard Petrie and Mrs. Carroll Petrie
    serve as the Trustees of the Foundation. The Trustees of the Foundation
    share equally the power to dispose of, and to vote, the units of beneficial
    interest held by the Foundation. Messrs. Flom and Petrie disclaim beneficial
    ownership of the units of beneficial interest held by the Foundation.

                                        15
<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Skadden, Arps, Slate, Meagher & Flom LLP serves as legal counsel to the
Liquidating Trust and to both the Estate of Milton Petrie and The Carroll and
Milton Petrie Foundation. Until November 12, 2003, the Estate of Milton Petrie
owned approximately 53.7% of the Liquidating Trust's outstanding units of
beneficial interest. On November 12, 2003, these units of beneficial interest
were transferred to The Carroll and Milton Petrie Foundation. Skadden, Arps,
Slate, Meagher & Flom LLP has provided services to each of the Liquidating
Trust, the Estate of Milton Petrie and The Carroll and Milton Petrie Foundation
during the year ended December 31, 2003. Joseph H. Flom, a Liquidating Trustee,
an executor of the Estate of Milton Petrie and a Trustee of The Carroll and
Milton Petrie Foundation, is a partner in Skadden, Arps, Slate, Meagher & Flom
LLP.

     During 2003, The Liquidating Trust maintained directors' and officers'
liability insurance provided by Continental Casualty Company, an affiliate of
CNA Financial Corp. Laurence A. Tisch, a former Liquidating Trustee and a former
executor of the Estate of Milton Petrie, was Chairman of the Board of CNA
Financial Corp until the time of his death in 2003.

     Messrs. Flom and Petrie are Trustees of The Carroll and Milton Petrie
Foundation and are entitled to compensation, but they have elected not to
receive such compensation. Messrs. Flom and Petrie are executors, and Mr. Tisch
was until the time of his death an executor, of the Estate of Milton Petrie and
are entitled to executor's commissions. Mr. Petrie is also a beneficiary of the
Estate of Milton Petrie.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     Ernst & Young LLP ("E&Y") has served as the Liquidating Trust's independent
auditors since 1995. Fees for services provided by E&Y for the past two
completed fiscal years ended December 31 were as follows:

<Table>
<Caption>
                                                                2003       2002
                                                              --------   --------
<S>                                                           <C>        <C>
Audit Fees..................................................  $ 50,100   $ 43,325
Audit-Related Fees..........................................        --         --
Tax Fees....................................................  $ 72,200   $ 67,120
All Other Fees..............................................        --         --
Total.......................................................  $122,300   $110,445
</Table>

     Audit fees include fees for the audit of the Liquidating Trust's annual
financial statements and the reviews of the financial statements included in the
Liquidating Trust's quarterly reports on Form 10-Q.

     Tax fees include fees incurred to compile and distribute tax reporting
information to holders of the Liquidating Trust's units of beneficial interest.

PRE-APPROVAL POLICIES AND PROCEDURES

     On an annual basis the Liquidating Trustees review and approve all services
expected to be performed by E&Y in the ensuing one-year period.

                                        16
<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).
10.10   Agreement, dated as of December 24, 2003, between the
        Liquidating Trust and Toys "R" Us.
14.1    Code of Ethics of Petrie Stores Liquidating Trust.
31.1    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.
</Table>

                                        17
<PAGE>
<Table>
<C>     <S>
31.2    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.
32.1    Certification 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.
        (b) REPORTS ON FORM 8-K.
        Current Report on Form 8-K dated January 9, 2004 (reporting
        liquidating distribution of $20,940,095 in cash to unit
        holders of the Liquidating Trust).
        (c) See Item 15(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 15(a)(3) upon payment by such holder of
        the Liquidating Trust's reasonable expenses in furnishing
        any such exhibit.
        (d) See Item 15(a)(2) above.
</Table>

                                        18
<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 30, 2004

     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.

                                          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/ RAYMOND S. TROUBH
                                            ------------------------------------
                                                     Raymond S. Troubh
                                                          Trustee

Dated: March 30, 2004

                                        19
<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,
     2003 and
     December 31, 2002......................................   F-3
  Statements of Changes in Net Assets in Liquidation -- For
     the years ended
     December 31, 2003, 2002 and 2001.......................   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, 2003 and December 31, 2002, and the
related statements of changes in net assets in liquidation for each of the three
years in the period ended December 31, 2003. 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, 2003 and December 31, 2002 and the changes in
net assets in liquidation for each of the three years in the period ended
December 31, 2003, in conformity with accounting principles generally accepted
in the United States.

                                          ERNST & YOUNG LLP

MetroPark, New Jersey
March 16, 2004

                                       F-2
<PAGE>

                        PETRIE STORES LIQUIDATING TRUST
                    (SUCCESSOR TO PETRIE STORES CORPORATION)

                    STATEMENTS OF NET ASSETS IN LIQUIDATION

<Table>
<Caption>
                                                              DECEMBER 31,   DECEMBER 31,
                                                                  2003           2002
                                                              ------------   ------------
                                                                    (IN THOUSANDS)
<S>                                                           <C>            <C>
                                         ASSETS
Cash and cash equivalents...................................    $ 1,168        $     9
U.S. Treasury Obligations...................................     63,986         88,907
                                                                -------        -------
Total assets................................................     65,154         88,916

                                       LIABILITIES
Accrued expenses and other liabilities......................     25,595         25,920
Commitments and contingencies
                                                                -------        -------
Net assets in liquidation...................................    $39,559        $62,996
                                                                =======        =======
</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,
                                                              2003           2002           2001
                                                          ------------   ------------   ------------
                                                           (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
<S>                                                       <C>            <C>            <C>
Net assets in liquidation at beginning of year..........    $ 62,996       $62,547        $58,281
                                                            --------       -------        -------
Investment income.......................................         736         1,720          4,171
Corporate overhead benefit (expense)....................       2,002        (1,270)            94
                                                            --------       -------        -------
Net income for the year.................................       2,738           450          4,265
                                                            --------       -------        -------
Liquidating distributions...............................     (26,175)           --             --
                                                            --------       -------        -------
Net assets in liquidation at end of year................    $ 39,559       $62,996        $62,546
                                                            ========       =======        =======
Net income per unit.....................................    $   0.05       $  0.01        $  0.08
                                                            ========       =======        =======
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, 2003

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).

     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, 2003 and December 31, 2002 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 Toys
Common Stock. At December 31, 2003 and 2002, the Liquidating Trust did not own
any shares of Toys Common Stock.

3.  LIQUIDATING DISTRIBUTIONS.

     Pursuant to an agreement dated as of December 24, 2003, the Liquidating
Trust and Toys "R" Us agreed to terminate the Liquidating Trust's obligations
under a letter agreement dated as of January 24, 1995 to provide notice to Toys
"R" Us (and an opportunity for Toys "R" Us to object) prior to making any
liquidating distributions. Accordingly, the Liquidating Trust is no longer
obligated to provide notice to Toys "R" Us prior to making distributions.

     On January 30, 2004, the Liquidating Trust distributed to its unit holders
a total of $20,940,095 in cash. In the distribution, unit holders received $0.40
in cash for each unit of beneficial interest held of record at the close of
business on January 20, 2004. This distribution will be reflected in the
statement of changes in net assets in liquidation for the quarter ended March
31, 2004.

     On January 31, 2003, the Liquidating Trust distributed to its unit holders
a total of $26,175,119 in cash. In the distribution, unit holders received $0.50
in cash for each unit of beneficial interest held of record at the close of
business on January 21, 2003. This distribution is reflected in the statement of
changes in net assets in liquidation for the year ended December 31, 2003.

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

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

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

experience (including that of its predecessor, Petrie) in contesting, litigating
and settling matters. At both December 31, 2003 and December 31, 2002, the
Liquidating Trust had accrued approximately $25 million 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 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

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

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Distribution Company. On December 18, 2001, the Liquidating Trust received
$1,530,000 as partial payment of the Liquidating Trust's claim against the
Distribution Company. On or about July 1, 2003, the Liquidating Trust received
an additional $1,836,000 as partial payment of the Liquidating Trust's claim
against the Distribution Company. As of March 25, 2004, the Liquidating Trust's
remaining claim against the Distribution Company was $11,169,000. There can be
no assurance as to the timing of the payment, if any, 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 or about December 30, 2003, the Liquidating Trust received a refund in
respect of previous tax years of approximately $949,000 to which the Liquidating
Trust is entitled pursuant to a settlement agreement between the Liquidating
Trust and the Petrie Retail bankruptcy estate.

     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.

     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 $27 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, 2003, and (ii)
approximately $3 million in potential liability related to 26 of the store
leases which were either assigned to third party retailers or are still held by
the successor of Petrie Retail, and 53 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.

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

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

     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. The
two former executives have since died and, as a result, the Liquidating Trust's
obligations under the settlement agreements with such executives have been
terminated. The total cost of these settlements to the Liquidating Trust was
approximately $3.2 million.

     Insurance Premium Adjustment.  In April 2002, the Liquidating Trust
received a bill from Zurich N.A. ("Zurich"), an insurer of Petrie, for $551,338
in respect of retrospective premium adjustments purportedly owed by Petrie
pursuant to general liability, automobile and workers' compensation 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 has received a bill dated February 10, 2004 from
Zurich for $84,343 in respect of retrospective premium adjustments purportedly
owed by Petrie pursuant to general liability, automobile and workers'
compensation 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, 2003. This amount is
included in accrued expenses and other liabilities at December 31, 2003.

     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, 2003
and December 31, 2002 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, 2003
Net income..........................................   $   1     $1,847(1)    $  16      $ 874(2)
                                                       =====     ======       =====      =====
Net income per unit.................................   $0.00     $ 0.04       $0.00      $0.01
                                                       =====     ======       =====      =====
Year ended December 31, 2002:
Net income (loss)...................................   $ 273     $  157       $  88      $ (68)
                                                       =====     ======       =====      =====
Net income per unit.................................   $0.01     $ 0.00       $0.00      $0.00
                                                       =====     ======       =====      =====
</Table>

                                       F-9
<PAGE>
                        PETRIE STORES LIQUIDATING TRUST
                    (SUCCESSOR TO PETRIE STORES CORPORATION)

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

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

(1) On or about July 1, 2003, the Liquidating Trust received $1,836,000 as
    partial settlement of the Liquidating Trust's claim against the Petrie
    Retail bankruptcy estate. This payment was accrued as of June 30, 2003.

(2) On or about December 30, 2003, the Liquidating Trust received a refund in
    respect of previous tax years of approximately $949,000 to which the
    Liquidating Trust is entitled pursuant to a settlement agreement between the
    Liquidating Trust and the Petrie Retail bankruptcy estate.

6.  SUBSEQUENT EVENTS.

     On January 30, 2004, the Liquidating Trust made a distribution to its unit
holders in the amount of $0.40 in cash for each unit of beneficial interest held
of record at the close of business on January 20, 2004. There were 52.35 million
units outstanding on January 20, 2004 and the total distribution amounted to
approximately $20.9 million.

                                       F-10