================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                     -------

                                    FORM 10-Q
                                Quarterly Report
                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                                   -----------

               For the quarterly period ended September 30, 2005
                         Commission file number: 0-3777

                         Petrie Stores Liquidating Trust
             (Exact Name of Registrant as Specified in Its Charter)

New York                                                 22-6679945
-------------------------------                          -------------------
(State or Other Jurisdiction of                          (I.R.S. Employer
Incorporation or Organization)                           Identification No.)

201 Route 17, Suite 300
Rutherford, New Jersey                                   07070
----------------------------------------                 ----------
(Address of Principal Executive Offices)                 (Zip Code)

                                 (201) 635-9637
             -----------------------------------------------------
               Registrant's Telephone Number, Including Area Code

                                 Not Applicable
             -----------------------------------------------------
               Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report


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 whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act.)
         Yes:             No:   X
              -----           -----

Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date: As of November 3, 2005, there
were 52,350,238 Units of Beneficial Interest outstanding.


================================================================================

<PAGE>

                         PETRIE STORES LIQUIDATING TRUST

                               INDEX TO FORM 10-Q

PART I - FINANCIAL INFORMATION
                                                                            Page
                                                                            ----
Item 1.  Financial Statements
         Statements of Net Assets in Liquidation - September 30,
            2005 (Unaudited) and December 31, 2004............................ 2
         Statements of Changes in Net Assets in Liquidation
            (Unaudited) - For the Three and Nine Months Ended September
            30, 2005 and 2004................................................. 3
         Notes to Financial Statements........................................ 4
Item 2.  Management's Discussion and Analysis of Financial Condition
            and Results of Operations..........................................9
Item 3.  Quantitative and Qualitative Disclosures About Market Risk ..........13
Item 4.  Controls and Procedures..............................................13

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings....................................................14
Item 6.  Exhibits.............................................................14


                                       1
<PAGE>


                         PETRIE STORES LIQUIDATING TRUST

                     STATEMENTS OF NET ASSETS IN LIQUIDATION

                                 (In thousands)

                                              September 30, 2005    December 31,
                                                  (Unaudited)           2004
                                              ------------------    ------------
Assets
Cash and cash equivalents...................  $              63     $        211
U.S. Treasury obligations...................             28,661           43,624
Prepaid expenses............................                 48               11
                                              ------------------    ------------
Total assets................................             28,772           43,846

Liabilities
Accrued expenses and other liabilities......             15,684           15,988

Commitments and contingencies

                                              ------------------    ------------
Net assets in liquidation...................  $          13,088     $     27,858
                                              ==================    ============


See accompanying notes.


                                       2
<PAGE>

                         PETRIE STORES LIQUIDATING TRUST

<TABLE>
               STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION

                                   (Unaudited)
                     (In thousands, except per unit amounts)

<CAPTION>
                                            Three Months      Three Months      Nine Months       Nine Months
                                                Ended            Ended             Ended             Ended
                                            September 30,     September 30,     September 30,     September 30,
                                                2005              2004              2005              2004
                                           ---------------  ----------------  ----------------  ----------------
<S>                                        <C>              <C>               <C>               <C>
Net assets in liquidation at beginning
of period................................  $       12,606   $        18,277   $        27,858   $        39,559
                                           ---------------  ----------------  ----------------  ----------------
Investment income........................             224               140               674               355
Corporate overhead benefit (expense)
(includes a refund in respect of
previous tax years of approximately $569
in June 2005 and a payment from the
Distribution Company of approximately
$352 in July 2005).......................
                                                      258              (122)              261              (679)
                                           ---------------  ----------------  ----------------  ----------------

Net income (loss) for the period.........             482                18               935              (324)
                                           ---------------  ----------------  ----------------  ----------------
Liquidating distributions................                                             (15,705)          (20,940)
                                           ---------------  ----------------  ----------------  ----------------
Net assets in liquidation at end of
period...................................  $       13,088   $        18,295   $        13,088   $        18,295
                                           ===============  ================  ================  ================

Net income (loss) per unit...............  $         0.01   $          0.00   $          0.02   $         (0.01)
                                           ===============  ================  ================  ================

Weighted average number of units.........          52,350            52,350            52,350            52,350
                                           ===============  ================  ================  ================

</TABLE>

See accompanying notes.


                                       3

<PAGE>

                         PETRIE STORES LIQUIDATING TRUST
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

                               September 30, 2005

1.       Interim Reporting
         -----------------

         The accompanying unaudited financial statements of Petrie Stores
Liquidating Trust (the "Liquidating Trust") have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of the Liquidating Trust, all adjustments (consisting of only
normal recurring accruals) considered necessary for a fair presentation have
been included. Results for the three and nine months ended September 30, 2005
are not necessarily indicative of the results that may be expected for the
current fiscal year. For further information, reference is made to the financial
statements and footnotes thereto included in the Liquidating Trust's Annual
Report on Form 10-K for the year ended December 31, 2004.

2.       Basis of Presentation
         ---------------------

         The Liquidating Trust is the successor to Petrie Stores Corporation, a
New York corporation that was dissolved effective February 5, 1997 ("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
of Shareholders, held on December 6, 1994, Petrie's shareholders approved 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. At Petrie's Reconvened
Annual Meeting of Shareholders, 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 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 amounts of
which are subject to inherent uncertainty in the valuation process. The amounts
actually realized or settled could be materially different from those reflected
in the financial statements (Note 5).

         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).

                                       4
<PAGE>

         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. Under such basis, assets and
liabilities have been recorded at estimated fair values. In accordance with the
liquidation basis of accounting, the financial statements reflect the estimated
costs of liquidating the assets and distributing the proceeds to holders of
beneficial interests. The statements of net assets in liquidation at September
30, 2005 and December 31, 2004 do not distinguish between current and long-term
balances as would be reflected if such statements had been prepared on a
going-concern basis.

         At the Succession Date, and as a result of the Succession, Petrie
ceased to be a taxable entity. The Liquidating Trust is a complete pass-through
entity for federal income taxes and, accordingly, is not itself 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.

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. The Liquidating Trust's most significant estimate is associated with
the accrual for certain contingent liabilities (see Note 5).

3.       Related Party Transactions
         --------------------------

         Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden, Arps") serves as
legal counsel to the Liquidating Trust. Joseph H. Flom, a Liquidating Trustee,
is a partner in Skadden, Arps. At September 30, 2005 and December 31, 2004, the
accrued expenses and liabilities of the Liquidating Trust included in the
Statement of Net Assets in Liquidation included $83,998 and $161,450,
respectively, for amounts owed to Skadden, Arps. During the three and nine
months ended September 30, 2005, the corporate overhead expense of the
Liquidating Trust included in the Statement of Changes in Net Assets in
Liquidation included $35,000 and $194,000, respectively, of expenses to Skadden,
Arps. During the three and nine months ended September 30, 2004, the corporate
overhead expense of the Liquidating Trust included in the Statement of Changes
in Net Assets in Liquidation included $20,000 and $74,000, respectively, of
expenses to Skadden, Arps.

4.       Liquidating Distributions
         -------------------------

         Pursuant to an agreement dated as of December 24, 2003, the Liquidating
Trust and Toys "R" Us terminated 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 March 31, 2005, the Liquidating Trust announced a distribution of
$15,705,071 in cash that was paid on April 21, 2005. In the distribution, unit
holders received $0.30 in cash for each unit of beneficial interest held of
record at the close of business on April 11, 2005.

                                       5
<PAGE>

         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.

5.       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 the
Liquidating Trust has liability and when such liability 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.
The Liquidating Trust had accrued approximately $16 million for the
aforementioned contingent liabilities at both September 30, 2005 and December
31, 2004. As the scope of these liabilities becomes further refined and
additional analysis is performed, there may be changes in the estimates of
future liabilities, 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

                                       6
<PAGE>

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 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. On
July 29, 2005, the Liquidating Trust received a distribution in the amount of
$351,900 from the Distribution Company, which informed the Liquidating Trust
that such payment would be the final distribution. The Liquidating Trust's
aggregate recovery in respect of its $15,300,000 claim against the Distribution
Company was $4,482,900.

         On June 7, 2005, the Liquidating Trust received a final refund in
respect of previous tax years of approximately $569,000 to which the Liquidating
Trust was entitled pursuant to a settlement agreement between the Liquidating
Trust and the Petrie Retail bankruptcy estate. 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 was 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

                                       7
<PAGE>

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, including 61 leases that were rejected during the
pendency of the Petrie Retail bankruptcy (the "Rejected Leases") and 79 other
leases described below. The Liquidating Trust's exposure relating to the 140
retail leases, without giving effect to any present value discount and assuming
the landlord in each case is unable to mitigate its damages, but after giving
effect to the factors described in the following paragraph, would be
approximately $20 million. Such exposure includes approximately $15 million in
potential liability related to 61 of the Rejected Leases described above, which
amount is included in the Liquidating Trust's accrued expenses and other
liabilities at September 30, 2005 and December 31, 2004.

         In the fourth quarter of 2004, the Liquidating Trust commissioned its
real estate advisor to visit the properties underlying the Rejected Leases to
assess the level of risk of liability associated with such properties (including
whether the property was vacant). After receiving a report as to such property
visits, the Liquidating Trust determined to reduce its accrual related to
exposure under the Rejected Leases by $9 million. In making such determination
to reduce the accrual, the Liquidating Trust assessed a number of factors,
including (1) applicable law related to the impact of an affirmative defense
available to the Liquidating Trust relating to the expiration of the statute of
limitations within which claims relating to certain of the Rejected Leases would
have had to have been made (the "Statute of Limitations Defense"), (2) the
absence of any new landlord claims over the past several years related to
rejected store leases, (3) the Liquidating Trust's previous settlement history
related to rejected lease claims and (4) reports prepared by the Liquidating
Trust's real estate advisor. Prior to giving effect to the reduction in its
accrual related to Rejected 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, was
approximately $24 million. The approximately $15 million in potential liability
related to the 61 Rejected Leases is an estimate of the Liquidating Trust's
exposure under such leases after giving full effect to the factors described in
this paragraph. As of September 30, 2005, nothing has come to the attention of
the Liquidating Trust that causes it to believe that such estimate is no longer
accurate.

         The Liquidating Trust's exposure also includes approximately $5 million
in potential liability related to 16 of the store leases which were either
assigned to third party retailers or are still held by the successor of Petrie
Retail and were not rejected in the Petrie Retail bankruptcy (the "Assigned
Non-Rejected Leases") and a de minimis amount related to 63 of the leases which
have expired or were terminated by mutual landlord and tenant consent described
above (the "Terminated Non-Rejected Leases"). Amounts related to Assigned
Non-Rejected Leases and Terminated Non-Rejected Leases are not included in the
Liquidating Trust's accrued expenses and other liabilities at September 30, 2005
or December 31, 2004. The potential exposure related to Assigned Non-Rejected
Leases includes potential liability related to lease extension options that may
be exercised following the assignment of leases to third party retailers;
however, such liability related to the Assigned Non-Rejected Leases is not
included in the potential liability described in the first sentence of this
paragraph until the actual lease renewal term commences.

                                       8
<PAGE>

         The Liquidating Trust's lease exposure calculations related to Rejected
Leases, Assigned Non-Rejected Leases and Terminated Non-Rejected Leases 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.

         Insurance Premium Adjustment. In April 2004, The Liquidating Trust
received a bill 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 related 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 was included in accrued expenses and other liabilities at December
31, 2003. Such amount was paid by the Liquidating Trust on May 12, 2004.

         In March 2005, the Liquidating Trust received a bill from Zurich for
$106,781 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, 2004. This amount was included in
accrued expenses and other liabilities as of March 31, 2005. Such amount was
paid by the Liquidating Trust on April 8, 2005.

         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.

Item 2.      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 provided herein.

         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 the
three and nine months ended September 30, 2005 and 2004, the Liquidating Trust's
activities were limited to continuing Petrie's liquidation in furtherance of the
Plan of Liquidation. Beginning with the period ended December 31, 1996, the
Liquidating Trust adopted the calendar year as its fiscal year.

                                       9
<PAGE>

Critical Accounting Policies

         The Liquidating Trust's financial statements are prepared in accordance
with accounting principles 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 under Note
5 to the Liquidating Trust's financial statements with respect to estimating the
Liquidating Trust's lease exposure may involve a higher degree of judgment and
complexity.

Results of Operations

         The Liquidating Trust's net income for the three and nine months ended
September 30, 2005 was $482,000 and $935,000, respectively, as compared to net
income of $18,000 for the three months ended September 30, 2004 and a net loss
of $324,000 for the nine months ended September 30, 2004.

         For the three and nine months ended September 30, 2005, the Liquidating
Trust incurred a benefit in corporate overhead of $258,000 and $261,000,
respectively. Expenses that constituted corporate overhead (excluding the
receipt of the tax refund and the final payment from the Distribution Company
described below) were $94,000 and $660,000, respectively. For the three and nine
months ended September 30, 2004, the Liquidating Trust incurred corporate
overhead expense of $122,000 and $679,000, respectively. 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 has 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, insurance, salaries for the Liquidating Trust's two
part-time employees, trustee fees, accounting fees, transfer agent fees and
printing and related expenses. The benefit in corporate overhead for the three
months ended September 30, 2005 reflects the receipt of $351,900 as the final
distribution from the Distribution Company. The benefit in corporate overhead
for the nine months ended September 30, 2005 reflects such amount and $569,000
of income arising from 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. The decrease in the
amount of expenses that constituted corporate overhead (before giving effect to
the receipt of the tax refund and the payment from the Distribution Company) for
the three and nine months ended September 30, 2005 compared to the three and
nine months ended September 30, 2004 is attributable principally to a decrease
in professional fees (reflecting a reimbursement of certain fees previously paid
by the Liquidating Trust) and the actions taken by the Liquidating Trust during
the year ended December 31, 2004 to reduce certain expenses, including
decreasing the salaries of its officers and Liquidating Trustees and the
expenses of its advisors.

         During the three and nine months ended September 30, 2005, the
Liquidating Trust earned investment income of $224,000 and $674,000,
respectively, as compared to $140,000 and $355,000, respectively, earned during
the three and nine months ended September 30, 2004. The increase in investment
income for the three and nine months ended September 30, 2005 was due to higher
prevailing interest rates.

                                       10
<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 November 3, 2005, the Liquidating Trust had approximately $29
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 more fully described in Item 1 of Part I, the Liquidating Trust, as
successor to Petrie, 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 to
the extent that Petrie Retail or its successor fails to perform. At September
30, 2005, the Liquidating Trust, as successor to Petrie, had accrued
approximately $16 million for 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. See Notes to Financial Statements.

                                       11
<PAGE>

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 Quarterly
Report on Form 10-Q 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 Quarterly Report on Form 10-Q,
the following important factors, among others, could cause the Liquidating
Trust's assets and liabilities to differ materially from those expressed in any
forward-looking statements made by, or on behalf of, the Liquidating Trust, and
could materially affect the Liquidating Trust's financial condition, liquidity
and future ability to make liquidating distributions:

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

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

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

         (4)   A decision by a court that the Statute of Limitations Defense is
               not available to the Liquidating Trust with respect to one or
               more Rejected Leases;

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

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

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

                                       12
<PAGE>

Item 3.      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 September 30, 2005.

Item 4.      Controls and Procedures.
             -----------------------

         (a)   Disclosure Controls and Procedures. The Liquidating Trust's
         management, with the participation of the Liquidating Trust's Chief
         Executive Officer and Chief Financial Officer, has evaluated the
         effectiveness of the Liquidating Trust's disclosure controls and
         procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e)
         under the Securities Exchange Act of 1934, as amended (the "Exchange
         Act")) as of the end of the period covered by this report. Based on
         such evaluation, the Liquidating Trust's Chief Executive Officer and
         Chief Financial Officer have concluded that, as of the end of such
         period, the Liquidating Trust's disclosure controls and procedures are
         effective.

         (b)   Internal Control Over Financial Reporting. There have not been
         any changes in the Liquidating Trust's internal control over financial
         reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f)
         under the Exchange Act) during the fiscal quarter to which this report
         relates that have materially affected, or are reasonably likely to
         materially affect, the Liquidating Trust's internal control over
         financial reporting.

                                       13
<PAGE>

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.
         -----------------

         See the discussion contained in the Notes to Financial Statements in
Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 6.  Exhibits.
         --------

                  Exhibit 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.

                  Exhibit 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.

                  Exhibit 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.


                                       14
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                            PETRIE STORES LIQUIDATING TRUST


Dated:  November 4, 2005                    By: /s/ Stephanie R. Joseph
                                                -------------------------------
                                            Stephanie R. Joseph
                                            Manager and Chief Executive Officer


Dated:  November 4, 2005                    By: /s/ H. Bartlett Brown
                                                -------------------------------
                                            H. Bartlett Brown
                                            Assistant Manager and Chief
                                            Financial Officer