**SECURITIES AND EXCHANGECOMMISSION**

**Washington, D.C. 20549**

** **

**FORM 10-K**

 

n Annual report pursuant to Section 13 or 15(d) of the Securities ExchangeAct of 1934

 

Forthe fiscal year ended December 31, 2005                                                      Commission file number 1-9524*

 

**BPPLIQUIDATING TRUST**

(Exact name of Registrant as specified in its Charter)

 

| **Maryland**                                                   |   | **02-6148466**                    |
|----------------------------------------------------------------|--------|-----------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (IRS Employer Identification No.) |
|                                                           |   |                              |
| **450 B Street, Suite 1900, San Diego, California**            |   | **92101**                         |
| (Address of principal executive offices)                       |   | (Zip Code)                        |

 

**(619) 641-1141**

Registrant’s telephone number, including area code

 

Securities registered pursuant to Section 12(b) of the Act:  **None**

 

Securities registered pursuant to Section 12(g) of the Act:  **None**

 

Indicateby check mark if the Registrant is a well-known seasoned issuer, as defined inRule 405 of the Securities Act.

 

YESo  NO ý

 

Indicateby check mark if the Registrant is not required to file reports pursuant toSection 13 or Section 15(d) of the Act.

 

YESý  NO o

 

Notapplicable. Reference is made to the Form 15 filed on June 28, 2002.

 

Indicateby check mark whether the Registrant: (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the Registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.

 

YESo NO o

 

Notapplicable. Reference is made to the Form 15 filed on June 28, 2002.

 

Indicateby check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K is not contained herein, and will not be contained, to the bestof Registrant’s knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-K or any amendment tothis Form 10-K.

 

NotApplicable.

 

Indicateby check mark whether the Registrant is a large accelerated filer, anaccelerated filer, or a non-accelerated filer (as defined in Exchange Act Rule12b-2).

 

Largeaccelerated filer o  Accelerated filer o  Non-accelerated filer ý

 

Indicateby check mark whether the Registrant is a shell company (as defined in Rule12b-2 of the Act).

 

YESo NO ý

 

Statethe aggregate market value of the voting and non-voting common equity held bynon-affiliates as of June 30, 2005.

 

Notapplicable.

 

Thenumber of units of beneficial interest outstanding as of December 31, 2005 waszero.

 

DOCUMENTS INCORPORATED BY REFERENCE

None

 

*BPPLiquidating Trust is the transferee of the assets and liabilities of BurnhamPacific Properties, Inc., and files reports under Burnham Pacific Properties,Inc.’s former Commission file number. Burnham Pacific Properties, Inc. filed aForm 15 on June 28, 2002, indicating its notice of termination of registrationand filing requirements.

 

 

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**BPP Liquidating Trust**

**Index to Form 10-K**

 
| ** **             | ** **                                                                                                          | **Page** |
|------------------------|---------------------------------------------------------------------------------------------------------------------|----------|
|                   |                                                                                                                |     |
| **Part I**             |                                                                                                                |     |
| ** **             |                                                                                                                |     |
| Item 1.                | Business                                                                                                            | 1        |
|                   |                                                                                                                |     |
| Item 2.                | Properties                                                                                                          | 3        |
|                   |                                                                                                                |     |
| Item 3.                | Legal Proceedings                                                                                                   | 3        |
|                   |                                                                                                                |     |
| Item 4.                | Submission of Matters to a  Vote of Beneficiaries                                                                   | 6        |
|                   |                                                                                                                |     |
| **Part II**            |                                                                                                                |     |
|                   |                                                                                                                |     |
| Item 5.                | Market for Registrant’s  Common Equity, Related Beneficiary Matters and Issuer Purchases of Equity  Securities | 7        |
|                   |                                                                                                                |     |
|                   |                                                                                                                |     |
| Item 6.                | Selected Financial Data                                                                                             | 8        |
|                   |                                                                                                                |     |
| Item 7.                | Management’s Discussion and  Analysis of Financial Condition and Results of Operations                         | 9        |
|                   |                                                                                                                |     |
|                   |                                                                                                                |     |
| Item 7A.               | Quantitative and Qualitative  Disclosures about Market Risk                                                         | 12       |
|                   |                                                                                                                |     |
| Item 8.                | Financial Statements                                                                                                | 13       |
|                   |                                                                                                                |     |
|                   | Statements of Net Assets  (Liquidation Basis)                                                                       | 13       |
|                   |                                                                                                                |     |
|                   | Statements of Changes in Net  Assets (Liquidation Basis)                                                            | 14       |
|                   |                                                                                                                |     |
|                   | Statements of Cash Flows  (Liquidation Basis)                                                                       | 15       |
|                   |                                                                                                                |     |
|                   | Notes to Financial  Statements                                                                                      | 16       |
|                   |                                                                                                                |     |
| Item 9.                | Changes in  and Disagreements with Accountants on Accounting and Financial Disclosure                               | 26       |
|                   |                                                                                                                |     |
| Item 9A.               | Controls and  Procedures                                                                                            | 26       |
|                   |                                                                                                                |     |
| Item 9B.               | Other Information                                                                                                   | 26       |
|                   |                                                                                                                |     |
| **Part III**           |                                                                                                                |     |
|                   |                                                                                                                |     |
| Item 10.               | Directors  and Executive Officers of the Registrant                                                                 | 27       |
|                   |                                                                                                                |     |
| Item 11.               | Trustee  Compensation                                                                                               | 28       |
|                   |                                                                                                                |     |
| Item 12.               | Security  Ownership of Certain Beneficial Owners and Management and Related Beneficiary  Matters                    | 29       |
|                   |                                                                                                                |     |
| Item 13.               | Certain  Relationships and Related Transactions                                                                     | 30       |
|                   |                                                                                                                |     |
| Item 14.               | Principal  Accountant Fees and Services                                                                             | 31       |
|                   |                                                                                                                |     |
| Item 15.               | Exhibits                                                                                                            | 32       |
|                   |                                                                                                                |     |
| **Index  of Exhibits** |
|                   |
| **Signature**          |

 

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**PART I**

 

ITEM1.                  BUSINESS.

 

**Liquidation of Burnham Pacific Properties, Inc.**

 

OnAugust 31, 2000, the Board of Directors of Burnham Pacific Properties, Inc.(the “Company”) adopted a Plan of Complete Liquidation and Dissolution (the“Plan of Liquidation”) and directed that the Plan of Liquidation be submittedto the Company’s stockholders for approval. The stockholders of the Companysubsequently approved the Plan of Liquidation at the 2000 Annual Meeting ofStockholders held on December 15, 2000.

 

ThePlan of Liquidation contemplated the orderly sale of all of the Company’sassets for cash or such other form of consideration as may be convenientlydistributed to the Company’s stockholders and the payment of (or provision for)the Company’s liabilities and expenses, as well as the establishment ofreserves to fund the Company’s contingent liabilities. The Plan of Liquidationgave the Company’s Board of Directors the power to sell any or all of theassets of the Company without further approval by the stockholders and requiredthat the final liquidating distribution, either directly to stockholders or toa liquidating trust, be made no later than December 15, 2002.

 

OnJune 28, 2002, the Company transferred its remaining assets to (and itsremaining liabilities were assumed by) Scott C. Verges and Douglas P. Wilson(the “Trustees”), as co-trustees of the BPP Liquidating Trust (the “Trust”), inaccordance with the Company’s Plan of Liquidation, and the Company wasdissolved. The last day of trading of the Company’s common stock on the NewYork Stock Exchange was June 27, 2002 (the “Record Date”), and the Company’sstock transfer books were closed as of the close of business on that date. Inaddition, on June 28, 2002 the Company filed a Form 15 with the Securities andExchange Commission (the “SEC”) to terminate the registration of the Company’scommon stock under Section 12(b) of the Securities Exchange Act of 1934, asamended (the “Exchange Act”), and its obligation to file periodic reports. TheCompany had previously received a no-action letter from the SEC regarding theExchange Act reporting obligations of the Trust.

 

Duringthe period of liquidation from December 16, 2000 through June 27, 2002, theCompany assigned, sold or otherwise disposed of all of its real estate assetsexcept its interests in four shopping centers: Palms to Pines shopping center, Central shopping center, Simi ValleyPlaza and Gateway Center (formerly known as Marin City).

 

Underthe terms of the Liquidating Trust Agreement executed by the Company and theTrustees on June 28, 2002, each stockholder of the Company on the Record Date(each, a “Beneficiary”) automatically became the holder of one unit ofbeneficial interest (a “Unit”) in the Trust for each share of Company commonstock then held of record by such stockholder, and all outstanding shares ofCompany common stock were automatically deemed cancelled. Stockholders of theCompany on the Record Date were not required to take any action to receivetheir Units. The rights of Beneficiaries in their Units are not represented byany form of certificate or other instrument. The Trust’s agent maintains arecord of the name and address of each Beneficiary and such Beneficiary’s aggregateUnits in the Trust. Subject to limited exceptions related to transfer by will,intestate succession or operation of law, the Units are not transferable.

 

1

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TheTrust was established for the sole purpose of winding up the Company’s affairsand the liquidation of its assets with no objective to continue or engage inthe conduct of a trade or business or cause any subsidiary to continue orengage in the conduct of a trade or business, except as necessary for theorderly liquidation of the Trust’s assets.

 

Uponreaching settlement on the final outstanding litigation items, the Trusteesdetermined that the purpose of the Trust was fulfilled. Therefore, on December29, 2005, the Trustees issued the final distribution and terminated the Truston that date. The accompanying financial statements show restricted cash andaccounts payable balances as of the fiscal year ended December 31, 2005. Thesebalances represent the funds held in escrow for the benefit of the Trust (see“Item 8 - Note 2 - Cash and Cash Equivalents”).

 

OnDecember 21, 2005, the Trustees of the Trust entered into an AdministrativeServices Agreement (the “Administrative Services Agreement”) with DouglasWilson Companies (the “Agent”). The Administrative Services Agreement providesfor the appointment of the Agent as the Trustees’ agent to take such actions asthe Agent deems necessary or appropriate to fulfill or cause to be fulfilledthe obligations of the Trust and the Trustees following the date on which theTrust was terminated, including, without limitation, retaining the books,records and other files in the possession of the Trustees as of the date oftermination, and responding to any requests, notices, claims, or actionsrelating to the Trust that may arise or first become known after the date oftermination.

 

**Tax Treatment**

 

Thefinal 2005 tax information is being distributed to the Beneficiaries concurrentwith the filing and mailing of this Form 10-K. Beneficiaries are urged toconsult with their own tax advisors as to their own filing requirements and theappropriate tax reporting of this information on their returns.

 

**Reports to Beneficiaries**

 

ThisForm 10-K is the final annual report to be distributed to the Beneficiaries.This Form 10-K shows the assets and liabilities of the Trust at the end of eachfiscal year and the receipts and disbursements of the Trust for the each fiscalyear. This annual report also describes the changes in the Trust’s assetsduring the reporting period and the actions taken by the Trustees during thereporting period.

 

**Distributions**

 

Duringthe life of the Trust from June 28, 2002 through December 29, 2005, the Trustmade liquidating distributions to the Beneficiaries in the aggregate amount of$1.4167 per Unit.

 

OnDecember 29, 2005, the Trust made the final liquidating distribution to theBeneficiaries in the amount of $0.1667 per Unit. During the fiscal year endedDecember 31, 2005, the Trust also made liquidating distributions to theBeneficiaries of $0.05 per Unit on March 7, 2005 and $0.05 per Unit on August31, 2005, for a cumulative liquidating distribution of $0.2667 per Unit for thefiscal year ended December 31, 2005.

 

2

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Duringthe fiscal year ended December 31, 2004, the Trust made a liquidatingdistribution to the Beneficiaries of $0.15 per Unit on March 31, 2004.

 

Duringthe fiscal year ended December 31, 2003, the Trust made liquidatingdistributions to the Beneficiaries of $0.30 per Unit on August 15, 2003, $0.10per Unit on October 15, 2003 and $0.10 per Unit on December 15, 2003, for acumulative liquidating distribution of $0.50 per Unit for the fiscal year endedDecember 31, 2003.

 

Duringthe period from June 28, 2002 through December 31, 2002, the Trust made aliquidating distribution to the Beneficiaries of $0.50 per Unit.

 

**Employees**

 

TheTrust has no full-time employees.

 

ITEM 2.     PROPERTIES.

 

**PropertyOwnership**

 

TheTrust did not own interests in any real estate properties during the fiscalyear ended December 31, 2005.

 

**Office Lease**

 

Forthe fiscal year ended December 31, 2005, the Trust did not incur any expensefor office space.

 

ITEM 3.       LEGALPROCEEDINGS.

 

**Lake Arrowhead Village**

 

InApril 2001, a lawsuit was filed in the Superior Court of the State ofCalifornia, County of Orange, by eleven tenants at the Company’s former LakeArrowhead Village property (the “Arrowhead Property”). The lawsuit was filedagainst the Company, the immediate former owner of the property who hadcontributed the property to the Company, as well as against all of theindividual and corporate managers and management companies of the propertyduring the periods of the tenants’ leases. The complaint alleged, among otherthings, breach of contract, fraud, intentional misrepresentation and unfairbusiness practices, and it alleged that the Company overcharged these tenantsfor common area maintenance (“CAM”). This lawsuit was resolved in June 2002after the Company made a statutory offer to allow a compromise judgment to beentered against the Company in the amount of $300,000.

 

3

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OnJanuary 17, 2003, the same eleven tenants who filed the aforementioned lawsuitin Orange County Superior Court, together with eight other tenants at theCompany’s former Arrowhead Property, filed a lawsuit in the Superior Court ofthe State of California, County of San Bernardino. The lawsuit was filedagainst the Company, the Trust, the Trustees, Scott C. Verges individually,LAV, LLC (the company that purchased the property from the Company in February2002), the former owner of the property who had contributed the property to theCompany, and many of the individual and corporate managers and managementcompanies of the property during the periods of the tenants’ leases. LAV, LLC,is an entity in which Scott C. Verges, a co-trustee of the Trust, is a member.(See “Item 13 - Certain Relationships and Related Transactions”).

 

OnMarch 10, 2003, the lawsuit was removed to the United States District Court forthe Central District of California, Eastern Division. However, thetenants/plaintiffs voluntarily dismissed their RICO claim whereupon the lawsuitwas sent back to the San Bernardino Superior Court. By motion practice whichoccurred over a period of eight months, six claims from the complaint andamendments thereto have been dismissed with prejudice (namely, false statementagainst realty, intentional interference with prospective business advantage,negligent interference with business advantage, waste, breach of the impliedcovenant of fair dealing and impress and foreclose equitable liens). In betweenamendments of the complaint, one plaintiff (who was also a plaintiff in theearlier lawsuit) dropped out of the lawsuit. In addition, two additionalplaintiffs (who were both tenants under one lease) subsequently dropped out andone plaintiff was added. The plaintiffs’ final complaint alleged, among otherclaims, breach of contract, fraud, intentional misrepresentation and unfairbusiness practices, and it alleged that the Company overcharged these tenantsfor CAM.

 

EffectiveAugust 1, 2005, the Trust and all of the other parties to the lawsuit enteredinto a settlement agreement which disposed of all claims asserted in thelawsuit and all known and unknown claims between the plaintiffs and thedefendants, including the Trust. On August 9, 2005, at the request of theparties, the Court ordered the case dismissed, but retained limitedjurisdiction for the purpose of enforcing the terms of the settlementagreement. The Trust made aggregate settlement payments, net of payments madeby its insurer, equal to $270,000 to the plaintiffs. The settlement agreementalso includes mutual covenants not to sue and mutual releases of all known andunknown claims among the parties.

 

Inconjunction with the above described litigation, on February 4, 2003, theTrust, through its broker, Marsh Risk & Insurance Services, tendered thecomplaint in the Underlying Action to American International Specialty LinesInsurance Company (“AISLIC”) under the Directors, Officers and CorporateLiability Insurance Policy for Real Estate Investment Trusts, Policy No.473-95-69 (the “Policy”) issued by AISLIC to the Company for the period fromDecember 15, 2000 to December 15, 2002. The Policy provided a $20 millionaggregate limit of liability, and a $150,000 retention for judgments,settlements and defense costs for nonsecurities claims. The Policy requiredAISLIC to advance defense costs of any covered claim prior to its final disposition.On March 25, 2004, AISLIC acknowledged in writing that the Company,BPP/Arrowhead, L.P., BPP/Arrowhead, Inc., and Burnham Pacific OperatingPartnership, L.P. were covered under the Policy, as well as certain individualswho were directors and/or officers of the Company. AISLIC declined coverage forthe Trust and individuals who were sued in their capacity as Trustees for theTrust. AISLIC paid defense and settlement costs of BPP/Arrowhead, L.P.,BPP/Arrowhead, Inc. and Burnham Pacific Operating Partnership, L.P., subject tocertain limitations, in the aggregate amount of approximately $1,263,000.

 

4

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**Developers Diversified Realty**

 

TheTrust was involved in legal proceedings with Developers Diversified RealtyCorporation (“DDRC”) and DDR Real Estate Services, Inc. (“DDRRES”), anaffiliate of DDRC which acted as the Company’s liquidator and property managerfor the period from December 15, 2000 through June 27, 2002.

 

OnJanuary 10, 2003, DDRRES filed a lawsuit against the Company and Trust in theSupreme Court of the State of New York, Monroe County. DDRRES’ lawsuit allegedbreach of contract and related claims arising from the liquidation and propertymanagement services that DDRRES was to perform. DDRRES’ lawsuit sought monetarydamages of approximately $98,000 and a judicial declaration that DDRRES isentitled to retain construction management fees obtained from the Company inthe amount of approximately $530,000. The trial court dismissed the lawsuit forlack of jurisdiction in August 2003. DDRRES appealed the trial court’sdecision. In November 2004, the New York appellate court issued a unanimouswritten opinion affirming the trial court’s decision.

 

TheTrust, acting through its Trustees, filed a lawsuit on January 13, 2003,against DDRRES in the Superior Court of the State of California, County ofContra Costa, based on DDRRES’ acts and omissions as the Company’s liquidatorand property manager. The lawsuit, which the Trust amended in 2004 to add DDRCas an additional defendant, alleged breach of contract, breach of fiduciaryduty, negligence, unfair business practices and related claims. DDRRES and DDRCfiled a cross-complaint in 2004 seeking monetary damages of approximately$98,000 for non-payment of asset management fees.

 

OnJuly 25, 2005, the Trust, DDRC, and DDRRES agreed to settle this litigation andthe Superior Court entered a settlement agreement into the record. Under theterms of the settlement agreement, DDR made a $700,000 cash payment to theTrust on August 24, 2005. The settlement agreement also included a mutualrelease of all claims between the parties.

 

**RVIP and Sparks, Inc.**

 

TheTrust was also involved in legal proceedings arising from a sale by the Companyof a shopping center in Richmond, California, to Prudential Real EstateInvestors, DDRC and Coventry Partners (collectively, “RVIP”) in April 2001.Sparks, Inc. (“Sparks”) is a restaurant tenant at the shopping center. In April2004, Sparks filed an action in the Superior Court of the State of California,County of Contra Costa, against RVIP and the Trust for damages and specificperformance. Sparks sought to enforce an option to purchase the restaurantpremises. As to the Trust, Sparks sought unspecified damages for breach of a retaillease and breach of the implied covenant of good faith and fair dealing. InAugust 2004, the Trust filed a cross-complaint for indemnity against RVIP. InDecember 2004, the Trust filed an answer to Sparks’ complaint that denied allof Sparks’ liability and damages claims. The Trust also filed a motion forsummary judgment.

 

InMarch 2005, RVIP and Sparks, Inc. entered into a settlement that included apayment of $30,000 from the Trust to Sparks, Inc. in exchange for a release anddismissal of all claims.

 

5

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ITEM 4.                  SUBMISSIONOF MATTERS TO A VOTE OF BENEFICIARIES.

 

Nomatters were submitted to a vote of the Beneficiaries during the fiscal yearended December 31, 2005.

 

6

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**PART II**

 

ITEM 5.                                                     MARKET FOR REGISTRANT’S COMMON EQUITY,RELATED BENEFICIARY MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 

**Market Information**

 

Thereis no public market for the Units of the Trust. On June 27, 2002, the Companyformally closed its stock transfer books and its common stock was delisted fromthe New York Stock Exchange. On June 28, 2002, the Company filed a Form 15 withthe SEC to terminate the registration of its common stock under the ExchangeAct and its obligation to file periodic reports with respect thereto.

 

**Holders**

 

TheUnits were not transferable except by will, intestate succession or operationof law. At December 29, 2005, the Trust had approximately 1,500 Beneficiariesof record and 32,928,220 Units outstanding. The Trust was terminated onDecember 29, 2005. Accordingly, at December 31, 2005, the Trust had noBeneficiaries or Units outstanding.

 

**Distributions**

 

Duringthe life of the Trust from June 28, 2002 through December 29, 2005, the Trustmade liquidating distributions to the Beneficiaries in the aggregate amount of$1.4167 per Unit.

 

OnDecember 29, 2005, the Trust made the final liquidating distribution in theamount of $0.1667 per Unit. During the fiscal year ended December 31, 2005, theTrust also made liquidating distributions to the Beneficiaries of $0.05 perUnit on March 7, 2005 and $0.05 per Unit on August 31, 2005, for a cumulativeliquidating distribution of $0.2667 per Unit for the fiscal year ended December31, 2005.

 

Duringthe fiscal year ended December 31, 2004, the Trust made a liquidatingdistribution to the Beneficiaries of $0.15 per Unit on March 31, 2004.

 

Duringthe fiscal year ended December 31, 2003, the Trust made liquidatingdistributions to the Beneficiaries of $0.30 per Unit on August 15, 2003, $0.10per Unit on October 15, 2003 and $0.10 per Unit on December 15, 2003, for acumulative liquidating distribution of $0.50 per Unit for the fiscal year endedDecember 31, 2003.

 

Duringthe period from June 28, 2002 through December 31, 2002, the Trust made aliquidating distribution to the Beneficiaries of $0.50 per Unit.

 

7

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ITEM 6.                  SELECTEDFINANCIAL DATA.

 

Thefollowing selected financial data of the Trust are qualified by reference toand should be read in conjunction with the financial statements, related notesthereto, other financial data included elsewhere herein and Management’sDiscussion and Analysis of Financial Condition and Results of Operations, whichis included elsewhere in this Annual Report on Form 10-K. These historicalresults are not necessarily indicative of the results to be expected in thefuture.

 

CHANGESIN NET ASSET DATA (in thousands, except per Unit amounts)

 
| ** **                     | ** ** | **Fiscal  Year   Ended   December 31,   2005** | ** ** | **Fiscal  Year   Ended   December 31,   2004** | ** ** | **Fiscal  Year   Ended  December 31,   2003** | ** ** | **June 28,  2002 through  December 31,   2002** | ** ** |
|--------------------------------|------------|------------------------------------------------|------------|------------------------------------------------|------------|-----------------------------------------------|------------|-------------------------------------------------|------------|
|                           |       |                                           |       |                                           |       |                                          |       |                                            |       |
| Total Revenues                 |       | $                                              | 179        |                                           | $          | 125                                           |       | $                                               | 2,188      |   | $ | 2,176 |   |
|                           |       |                                           |       |                                           |       |                                          |       |                                            |       |
| Income/(Loss) From  Operations |       | $                                              | (288       | )                                              | $          | (53                                           | )          | $                                               | 26         |   | $ | (372 | ) |
|                           |       |                                           |       |                                           |       |                                          |       |                                            |       |
| Income/(Loss) Per Unit         |       | $                                              | (0.0087    | )                                              | $          | (0.0016                                       | )          | $                                               | 0.0008     |   | $ | (0.01 | ) |
|                           |       |                                           |       |                                           |       |                                          |       |                                            |       |
|                           |       |                                           |       |                                           |       |                                          |       |                                            |       |
| Distributions Paid             |       | $                                              | 8,783      |                                           | $          | 4,940                                         |       | $                                               | 16,466     |   | $ | 16,466 |   |
|                           |       |                                           |       |                                           |       |                                          |       |                                            |       |
| Distributions Paid Per  Unit   |       | $                                              | 0.2667     |                                           | $          | 0.15                                          |       | $                                               | 0.50       |   | $ | 0.50 |   |

 

 

NETASSET DATA (in thousands, except per Unit amounts)

 
| ** **                | ** ** | **As of   December 31,   2005** | ** ** | **As of   December 31,   2004** | ** ** | **As of   December 31,   2003** | ** ** | **As of December 31, 2002** | ** ** |
|---------------------------|------------|---------------------------------|------------|---------------------------------|------------|---------------------------------|------------|----------------------------------|------------|
|                      |       |                            |       |                            |       |                            |       |                             |       |
| Total Assets              |       | $                               | 174        |                            | $          | 10,452                          |       | $                                | 16,643     |   | $ | 65,744 |   |
|                      |       |                            |       |                            |       |                            |       |                             |       |
| Total Liabilities         |       | $                               | 174        |                            | $          | 5,288                           |       | $                                | 5,023      |   | $ | 39,235 |   |
|                      |       |                            |       |                            |       |                            |       |                             |       |
| Net Assets in Liquidation |       | $                               | 0          |                            | $          | 5,164                           |       | $                                | 11,620     |   | $ | 26,509 |   |
|                      |       |                            |       |                            |       |                            |       |                             |       |
| Net Asset Value per Unit  |       | $                               | 0          |                            | $          | 0.16                            |       | $                                | 0.  35     |   | $ | 0.81 |   |

 

8

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ITEM 7.                  MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

**Overview**

 

Thefollowing discussion should be read in conjunction with the consolidatedfinancial statements and notes thereto appearing elsewhere in this AnnualReport on Form 10-K (See Part II - Item 8 – “Financial Statements”).

 

Asa result of the adoption of the Plan of Liquidation and its approval by theCompany’s stockholders, the Company adopted the liquidation basis of accountingfor all periods subsequent to December 15, 2000. In accordance with theliquidation basis of accounting, assets are stated at their estimated netrealizable value and liabilities are stated at their estimated settlementamounts, including estimated costs associated with carrying out the liquidation.

 

Pursuantto the Plan of Liquidation, on June 28, 2002, the Company transferred thefollowing remaining assets and liabilities to the Trust (in thousands):

 

 

| Real Estate Held for Sale                                     |   | $       | 41,922 |   |
|---------------------------------------------------------------|--------|---------|--------|--------|
| Cash and Cash Equivalents                                     |   | 40,160  |   |
| Restricted Cash                                               |   | 734     |   |
| Receivables - Net                                             |   | 3,669   |   |
| Other Assets                                                  |   | 511     |   |
| Accounts Payable and Other  Liabilities                       |   | (2,786  | )      |
| Tenant Security Deposits                                      |   | (126    | )      |
| Notes Payable                                                 |   | (31,487 | )      |
| Reserve for Estimated  Costs During the Period of Liquidation |   | (9,187  | )      |
| Deferred Gain on Real  Estate Assets                          |   | (66     | )      |
| Net Assets in Liquidation                                     |   | $       | 43,344 |   |

 

**Results ofOperations**

 

TheTrust recorded a net loss of $288,000 ($0.0087 per Unit) for the fiscal yearended December 31, 2005 compared to net loss of $53,000 ($0.0016 per Unit) forthe fiscal year ended December 31, 2004. During the fiscal year ended December31, 2005, net loss was unfavorably impacted by an increase in general andadministrative expenses due to payment of the Trust’s final insurance policy.The increase in general and administrative expenses were slightly offset by anincrease in interest revenue.

 

TheTrust recorded a net loss of $53,000 ($0.0016 per Unit) for the fiscal yearended December 31, 2004 compared to net income of $26,000 ($0.0008 per Unit)for the fiscal year ended December 31, 2003. During the fiscal year endedDecember 31, 2004, net income was unfavorably impacted by the absence of rentalrevenue and a decrease in interest revenue as offset by the related absence ofrental operating and interest expense as well as an overall decrease in generaland administrative expenses.

 

9

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TheTrust recorded net income of $26,000 ($0.0008 per Unit) for the fiscal yearended December 31, 2003 compared to a net loss of $372,000 ($0.01 per Unit) forthe period from June 28, 2002 through December 31, 2002. Net income increasedprimarily due to a decrease in general and administrative, litigation and legalexpenses incurred by the Trust during the fiscal year ended December 31, 2003.General and administrative expenses include the costs and expenses ofconsultants, receivable collections, Beneficiary communications and othergeneral office expenses.

 

**Reserve forEstimated Costs During the Period of Liquidation (the “Reserve”)**

 

Underthe liquidation basis of accounting, costs associated with liquidating theTrust’s assets must be estimated and accrued in a reserve account. Theseamounts varied significantly due to, among other things, the costs of retainingpersonnel and one or more trustees to oversee the liquidation, the costs oflitigation, the timing and amounts associated with discharging fixed andcontingent liabilities, and the costs associated with cessation of the Trust’soperations.

 

OnDecember 31, 2004, the Reserve balance was $4,861,000. During the fiscal yearended December 31, 2005, the Trust made net payments against the Reserve in theamount of $1,042,000 and wrote-off the remaining Reserve balance of $3,819,000.

 

OnDecember 31, 2003, the Reserve balance was $3,913,000. During the fiscal yearended December 31, 2004, the Trust made payments against the Reserve in theamount of $1,664,000 and reserved an additional $2,612,000, resulting in aDecember 31, 2004 Reserve balance of $4,861,000.

 

OnDecember 31, 2002, the Reserve balance was $6,146,000. During the fiscal yearended December 31, 2003, the Trust made payments against the Reserve in theamount of $2,795,000 and reserved an additional $562,000, resulting in aDecember 31, 2003 Reserve balance of $3,913,000.

 

OnJune 28, 2002, the Reserve balance transferred by the Company to the Trust was$9,187,000. During the period from June 28, 2002 through December 31, 2002, theTrust made payments against the Reserve in the amount of $3,041,000 resultingin a December 31, 2002 Reserve balance of $6,146,000.

 

**Net Assetsin Liquidation**

 

NetAssets in Liquidation at December 31, 2005 were $0 compared to $5,164,000 or$0.16 per Unit as of December 31, 2004. The $5,164,000 decrease in Net Assetsin Liquidation was primarily attributable to the $8,783,000 in liquidatingdistributions made to the Beneficiaries and a net operating loss of $288,000,partially offset by increases in Net Assets in Liquidation due to amountsreceived upon settlement of litigation and subsequent liquidation reservewrite-offs of $3,819,000, litigation related accounts payable write-offs andreceipt of funds from various settlements and collections.

 

10

----

 

NetAssets in Liquidation at December 31, 2004 were $5,164,000 or $0.16 per Unitcompared to $11,620,000 or $0.35 per Unit as of December 31, 2003. The$6,456,000 decrease in Net Assets in Liquidation was primarily attributable tothe $4,940,000 liquidating distribution made to the Beneficiaries on March 31,2004 and the $2,612,000 increase in the Reserve, all partially offset byincreases in Net Assets in Liquidation due to receipt of funds from varioussettlements and collections.

 

NetAssets in Liquidation at December 31, 2003 were $11,620,000 or $0.35 per Unitcompared to $26,509,000 or $0.81 per Unit as of December 31, 2002. The$14,889,000 decrease in Net Assets in Liquidation was primarily attributable tothe liquidating distributions made to the Beneficiaries totaling $16,466,000during the fiscal year ended December 31, 2003, which were partially offset byincreases in Net Assets in Liquidation due to the sales of Gateway Center andthe note on Simi Valley Plaza as well as the receipt of funds frommiscellaneous settlements and collections.

 

**Distributions**

 

Duringthe life of the Trust from June 28, 2002 through December 29, 2005, the Trustmade liquidating distributions to the Beneficiaries in the aggregate amount of$1.4167 per Unit.

 

OnDecember 29, 2005, the Trust made the final liquidating distribution in theamount of $0.1667 per Unit. During the fiscal year ended December 31, 2005, theTrust also made liquidating distributions to the Beneficiaries of $0.05 perUnit on March 7, 2005 and $0.05 per Unit on August 31, 2005, for a cumulativeliquidating distribution of $0.2667 per Unit for the fiscal year ended December31, 2005.

 

Duringthe fiscal year ended December 31, 2004, the Trust made a liquidatingdistribution to the Beneficiaries of $0.15 per Unit on March 31, 2004.

 

Duringthe fiscal year ended December 31, 2003, the Trust made liquidatingdistributions to the Beneficiaries of $0.30 per Unit on August 15, 2003, $0.10per Unit on October 15, 2003 and $0.10 per Unit on December 15, 2003, for acumulative liquidating distribution of $0.50 per Unit for the fiscal year endedDecember 31, 2003.

 

Duringthe period from June 28, 2002 through December 31, 2002, the Trust made aliquidating distribution to the Beneficiaries of $0.50 per Unit as reported inthe Trust’s Annual Report on Form 10-K for the period from June 28, 2002through December 31, 2002.

 

**Dispositions**

 

TheTrust did not own interests in any real estate properties during the fiscalyears ended December 31, 2004 and 2005.

 

Duringthe fiscal year ended December 31, 2003, the Trust sold Gateway Center(formerly known as Marin City) for aggregate proceeds of approximately$5,900,000 in cash. On September 29, 2003, the note on Simi Valley Plaza, theTrust’s sole remaining property, was sold, terminating the Trust’s ownershipinterest in the property.

 

11

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Duringthe period from June 28, 2002 through December 31, 2002, the Trust sold theCentral Shopping Center and the Palms to Pines Shopping Center for aggregateproceeds of approximately $6,200,000 in cash.

 

# **Liquidityand Capital Resources**

# ** **

Asof December 31, 2005, the Trust did not own interests in any real estateproperty. The Trust’s two remaining properties were sold during the fiscal yearended December 31, 2003.

 

**Off-Balance Sheet Arrangements**

 

Notapplicable.

 

**Contractual Obligations**

 

Notapplicable.

 

ITEM7A.                                           QUANTITATIVE AND QUALITATIVE DISCLOSURESABOUT MARKET RISK. 

 

Notapplicable.

 

12

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ITEM 8.                  FINANCIALSTATEMENTS.

 

BPP LIQUIDATING TRUST

STATEMENTS OF NET ASSETS (LIQUIDATION BASIS)

DECEMBER 31, 2005, 2004, 2003 and 2002

(unaudited)

(in thousands)

 
| ** **                                                    | ** ** | **2005** | ** ** | **2004** | ** ** | **2003** | ** ** | **2002** | ** ** |
|---------------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|----------|------------|
| ASSETS                                                        |       |     |       |     |       |     |       |     |       |
| Real Estate Held for Sale                                     |       | $        | —     |     | $          | —   |       | $        | —     |   | $ | 35,772 |   |
|                                                          |       |     |       |     |       |     |       |     |       |
| Cash and Cash Equivalents                                     |       | —   |       | 10,361   |       | 15,448   |       | 26,811   |       |
| Restricted Cash                                               |       | 174      |       | —   |       | —   |       | 413      |       |
| Receivables-Net                                               |       | —   |       | 76       |       | 1,172    |       | 2,607    |       |
| Other Assets                                                  |       | —   |       | 15       |       | 23       |       | 141      |       |
| Total Assets                                                  |       | 174      |       | 10,452   |       | 16,643   |       | 65,744   |       |
|                                                          |       |     |       |     |       |     |       |     |       |
| LIABILITIES                                                   |       |     |       |     |       |     |       |     |       |
| Accounts Payable and Other  Liabilities                       |       | 174      |       | 427      |       | 1,110    |       | 1,783    |       |
| Tenant Security Deposits                                      |       | —   |       | —   |       | —   |       | 57       |       |
| Notes Payable                                                 |       | —   |       | —   |       | —   |       | 31,249   |       |
| Reserve for Estimated  Costs During the Period of Liquidation |       | —   |       | 4,861    |       | 3,913    |       | 6,146    |       |
| Total Liabilities                                             |       | 174      |       | 5,288    |       | 5,023    |       | 39,235   |       |
|                                                          |       |     |       |     |       |     |       |     |       |
|                                                          |       |     |       |     |       |     |       |     |       |
| NET ASSETS IN LIQUIDATION                                     |       | $        | —     |     | $          | 5,164    |       | $        | 11,620     |   | $ | 26,509 |   |

----

See Accompanying Notes

13

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BPP LIQUIDATING TRUST

STATEMENTS OF CHANGES IN NET ASSETS (LIQUIDATION BASIS) FOR THE FISCALYEAR ENDED 

DECEMBER 31, 2005, FOR THEFISCAL YEAR ENDED DECEMBER 31, 2004, FOR THE FISCAL YEAR ENDED 

DECEMBER 31, 2003, AND THEPERIOD

 FROM JUNE 28, 2002 THROUGH DECEMBER 31, 2002

(unaudited)

(in thousands, except per Unit amounts)

 
| ** **                                                                                                                 | ** ** | **January  1,   2005 through  December 31,  2005** | ** ** | **January  1,   2004 through   December 31,   2004** | ** ** | **January  1,  2003 through   December 31,   2003** | ** ** | **June 28,  2002   through   December 31,   2002** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------|------------|------------------------------------------------------|------------|-----------------------------------------------------|------------|----------------------------------------------------|------------|
|                                                                                                                       |       |                                               |       |                                                 |       |                                                |       |                                               |       |
| REVENUES                                                                                                                   |       |                                               |       |                                                 |       |                                                |       |                                               |       |
|                                                                                                                       |       |                                               |       |                                                 |       |                                                |       |                                               |       |
| Rents                                                                                                                      |       | $                                                  | —     |                                                 | $          | —                                              |       | $                                                  | 1,945      |   | $ | 1,793 |   |
| Interest and Other Income                                                                                                  |       | 179                                                |       | 125                                                  |       | 243                                                 |       | 383                                                |       |
|                                                                                                                       |       |                                               |       |                                                 |       |                                                |       |                                               |       |
| Total Revenues                                                                                                             |       | 179                                                |       | 125                                                  |       | 2,188                                               |       | 2,176                                              |       |
|                                                                                                                       |       |                                               |       |                                                 |       |                                                |       |                                               |       |
| COSTS AND EXPENSES                                                                                                         |       |                                               |       |                                                 |       |                                                |       |                                               |       |
|                                                                                                                       |       |                                               |       |                                                 |       |                                                |       |                                               |       |
| Interest                                                                                                                   |       | —                                             |       | —                                               |       | 676                                                 |       | 591                                                |       |
| Rental Operating                                                                                                           |       | —                                             |       | —                                               |       | 614                                                 |       | 584                                                |       |
| Provision for Bad Debt                                                                                                     |       | —                                             |       | —                                               |       | —                                              |       | 35                                                 |       |
| General and Administrative                                                                                                 |       | 467                                                |       | 178                                                  |       | 872                                                 |       | 1,180                                              |       |
| Litigation and Legal                                                                                                       |       | —                                             |       | —                                               |       | —                                              |       | 158                                                |       |
|                                                                                                                       |       |                                               |       |                                                 |       |                                                |       |                                               |       |
| Total Costs and Expenses                                                                                                   |       | 467                                                |       | 178                                                  |       | 2,162                                               |       | 2,548                                              |       |
|                                                                                                                       |       |                                               |       |                                                 |       |                                                |       |                                               |       |
| Net Income/(Loss)                                                                                                          |       | (288                                               | )          | (53                                                  | )          | 26                                                  |       | (372                                               | )          |
|                                                                                                                       |       |                                               |       |                                                 |       |                                                |       |                                               |       |
| Net Assets at December 31, 2004, December 31, 2003, December 31, 2002  and June 28, 2002, respectively                     |       | 5,164                                              |       | 11,620                                               |       | 26,509                                              |       | 43,344                                             |       |
|                                                                                                                       |       |                                               |       |                                                 |       |                                                |       |                                               |       |
| Adjustments to Net Assets in Liquidation                                                                                   |       | 3,907                                              |       | (1,463                                               | )          | 1,551                                               |       | 3                                                  |       |
|                                                                                                                       |       |                                               |       |                                                 |       |                                                |       |                                               |       |
| Liquidating Distributions                                                                                                  |       | (8,783                                             | )          | (4,940                                               | )          | (16,466                                             | )          | (16,466                                            | )          |
|                                                                                                                       |       |                                               |       |                                                 |       |                                                |       |                                               |       |
| Net Assets in Liquidation at December 31, 2005, December 31, 2004,  December 31, 2003, and December 31, 2002, respectively |       | $                                                  | —     |                                                 | $          | 5,164                                               |       | $                                                  | 11,620     |   | $ | 26,509 |   |
|                                                                                                                       |       |                                               |       |                                                 |       |                                                |       |                                               |       |
| Income/(Loss) Per Unit                                                                                                     |       | $                                                  | (0.01      | )                                                    | $          | (0.00                                               | )          | $                                                  | 0.00       |   | $ | (0.01 | ) |

----

See Accompanying Notes

14

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BPP LIQUIDATING TRUST

STATEMENTS OF CASH FLOWS (LIQUIDATION BASIS)

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005, FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004, FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003 AND THE PERIOD FROM JUNE 28, 2002 THROUGH DECEMBER 31, 2002

(unaudited)

(in thousands)—

 
| ** **                                                                            | ** ** | **January  1,   2005 through   December 31,   2005** | ** ** | **January  1,  2004 through   December 31,   2004** | ** ** | **January  1,   2003 through   December 31,   2003** | ** ** | **June 28,  2002   through   December 31,   2002** | ** ** |
|---------------------------------------------------------------------------------------|------------|------------------------------------------------------|------------|-----------------------------------------------------|------------|------------------------------------------------------|------------|----------------------------------------------------|------------|
|                                                                                  |       |                                                 |       |                                                |       |                                                 |       |                                               |       |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                 |       |                                                 |       |                                                |       |                                                 |       |                                               |       |
| Net Income/(Loss)                                                                     |       | $                                                    | (288       | )                                                   | $          | (53                                                  | )          | $                                                  | 26         |   | $ | (372 | ) |
| Adjustments to Reconcile Net Income/(Loss) to Net Cash used in  Operating Activities: |       |                                                 |       |                                                |       |                                                 |       |                                               |       |
| Provision for Bad Debt                                                                |       | 35                                                   |       |                                                |       |                                                 |       | —                                             |       |
| Changes in Other Assets and Liabilities:                                              |       |                                                 |       |                                                |       |                                                 |       |                                               |       |
| Receivables and Other Assets                                                          |       | 76                                                   |       | 1,001                                               |       | 1,688                                                |       | 1,397                                              |       |
| Accounts Payable and Other Liabilities                                                |       | (253                                                 | )          | (211                                                | )          | (623                                                 | )          | (1,002                                             | )          |
| Tenant Security Deposits                                                              |       | —                                               |       | —                                              |       | (2                                                   | )          | (69                                                | )          |
| Reserve for Estimated Costs During the Period of Liquidation                          |       | (960                                                 | )          | (1,664                                              | )          | (2,795                                               | )          | (3,041                                             | )          |
| Recognition of Deferred Gain                                                          |       | —                                               |       | —                                              |       | —                                               |       | (66                                                | )          |
| Miscellaneous Settlements and Collections                                             |       | 21                                                   |       | 780                                                 |       | 689                                                  |       | —                                             |       |
| Net Cash Used in Operating Activities                                                 |       | (1,404                                               | )          | (147                                                | )          | (1,017                                               | )          | (3,118                                             | )          |
|                                                                                  |       |                                                 |       |                                                |       |                                                 |       |                                               |       |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                 |       |                                                 |       |                                                |       |                                                 |       |                                               |       |
| Proceeds from Sales of Real Estate                                                    |       | —                                               | ** ** | **—**                                          |       | 5,920                                                |       | 6,200                                              |       |
| Post Closing Costs from Sales of Real Estate                                          |       | —                                               |       | —                                              |       | —                                               |       | (133                                               | )          |
| Restricted Cash                                                                       |       | (174                                                 | )          | —                                              |       | 394                                                  |       | 321                                                |       |
| Net Cash Provided by/(Used in) Investing Activities                                   |       | (174                                                 | )          | —                                              |       | 6,314                                                |       | 6,388                                              |       |
|                                                                                  |       |                                                 |       |                                                |       |                                                 |       |                                               |       |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                 |       |                                                 |       |                                                |       |                                                 |       |                                               |       |
| Principal Payments of Notes Payable                                                   |       | —                                               | ** ** | **—**                                          |       | (194                                                 | )          | (153                                               | )          |
| Liquidating Distributions Paid                                                        |       | (8,783                                               | )          | (4,940                                              | )          | (16,466                                              | )          | (16,466                                            | )          |
| Net Cash Used in Financing Activities                                                 |       | (8,783                                               | )          | (4,940                                              | )          | (16,660                                              | )          | (16,619                                            | )          |
|                                                                                  |       |                                                 |       |                                                |       |                                                 |       |                                               |       |
| Net Decrease in Cash and Cash Equivalents                                             |       | (10,361                                              | )          | (5,087                                              | )          | (11,363                                              | )          | (13,349                                            | )          |
| Cash and Cash Equivalents at Beginning of Period                                      |       | 10,361                                               |       | 15,448                                              |       | 26,811                                               |       | 40,160                                             |       |
| Cash and Cash Equivalents at End of Period                                            |       | $                                                    | —     |                                                | $          | 10,361                                               |       | $                                                  | 15,448     |   | $ | 26,811 |   |
|                                                                                  |       |                                                 |       |                                                |       |                                                 |       |                                               |       |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                                    |       |                                                 |       |                                                |       |                                                 |       |                                               |       |
| Cash Paid for Interest                                                                |       | $                                                    | —     |                                                | $          | —                                               |       | $                                                  | 737        |   | $ | 591 |   |

----

See Accompanying Notes

15

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**BPP LIQUIDATING TRUST**

**NOTES TO FINANCIAL STATEMENTS (UNAUDITED)**

 

**1.****                  ****PURPOSE OF THE BPP LIQUIDATING TRUST**

 

OnAugust 31, 2000, the Board of Directors of Burnham Pacific Properties, Inc.(the “Company”) adopted a Plan of Complete Liquidation and Dissolution (the“Plan of Liquidation”) and directed that the Plan of Liquidation be submittedto the Company’s stockholders for approval. The stockholders of the Companysubsequently approved the Plan of Liquidation at the 2000 Annual Meeting ofStockholders held on December 15, 2000.

 

ThePlan of Liquidation contemplated the orderly sale of all of the Company’sassets for cash or such other form of consideration as may be convenientlydistributed to the Company’s stockholders and the payment of (or provision for)the Company’s liabilities and expenses, as well as the establishment of reservesto fund the Company’s contingent liabilities. The Plan of Liquidation gave theCompany’s Board of Directors the power to sell any or all of the assets of theCompany without further approval by the stockholders and required that thefinal liquidating distribution, either directly to stockholders or to aliquidating trust, be made no later than December 15, 2002.

 

OnJune 28, 2002, the Company transferred its remaining assets to (and itsremaining liabilities were assumed by) Scott C. Verges and Douglas P. Wilson(the “Trustees”), as co-trustees of the BPP Liquidating Trust (the “Trust”), inaccordance with the Company’s Plan of Liquidation, and the Company wasdissolved. The last day of trading of the Company’s common stock on the NewYork Stock Exchange was June 27, 2002 (the “Record Date”), and the Company’sstock transfer books were closed as of the close of business on that date. Inaddition, on June 28, 2002 the Company filed a Form 15 with the Securities andExchange Commission (the “SEC”) to terminate the registration of the Company’scommon stock under Section 12(b) of the Securities Exchange Act of 1934, asamended (the “Exchange Act”), and its obligation to file periodic reports. TheCompany had previously received a no-action letter from the SEC regarding theExchange Act reporting obligations of the Trust.

 

Duringthe period of liquidation from December 16, 2000 through June 27, 2002, theCompany assigned, sold or otherwise disposed of all of its real estate assetsexcept its interests in four properties: Palms to Pines Shopping Center, Central Shopping Center, Simi ValleyPlaza and Gateway Center (formerly known as Marin City).

 

16

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Underthe terms of the Liquidating Trust Agreement executed by the Company and theTrustees on June 28, 2002, each stockholder of the Company on the Record Date(each, a “Beneficiary”) automatically became the holder of one unit ofbeneficial interest (a “Unit”) in the Trust for each share of Company commonstock then held of record by such stockholder, and all outstanding shares ofCompany common stock were automatically deemed cancelled. Stockholders of theCompany on the Record Date were not required to take any action to receivetheir Units. The rights of Beneficiaries in their Units are not represented byany form of certificate or other instrument. The Trust’s agent maintains arecord of the name and address of each Beneficiary and such Beneficiary’saggregate Units in the Trust. Subject to limited exceptions related to transferby will, intestate succession or operation of law, the Units are nottransferable, nor does a Beneficiary have authority or power to sell, or in anyother manner dispose of, any Units.

 

TheTrust was established for the sole purpose of winding up the Company’s affairsand the liquidation of its assets with no objective to continue or engage inthe conduct of a trade or business or cause any subsidiary to continue orengage in the conduct of a trade or business, except as necessary for theorderly liquidation of the Trust’s assets.

 

Uponreaching settlements on the final pending litigation items, the Trusteesdetermined that the purpose of the Trust was fulfilled. Therefore, on December29, 2005, the Trustees issued the final distribution and terminated the Truston that date. However, as of December 31, 2005, the Trust’s statement of netassets shows restricted cash and accounts payable balances. These balancesrepresent the funds held in escrow for the benefit of the Trust (see “Note 2 –Cash and Cash Equivalents”).

 

OnDecember 21, 2005, the Trustees of the Trust entered into an AdministrativeServices Agreement (the “Administrative Services Agreement”) with DouglasWilson Companies (the “Agent”). The Administrative Services Agreement providesfor the appointment of the Agent as the Trustees’ agent to take such actions asthe Agent deems necessary or appropriate to fulfill or cause to be fulfilledthe obligations of the Trust and the Trustees following the date on which theTrust was terminated, including, without limitation, retaining the books,records and other files in the possession of the Trustees as of the date oftermination, and responding to any requests, notices, claims, or actionsrelating to the Trust that may arise or first become known after the date oftermination.

 

**2.****             ****SUMMARY OF SIGNIFICANTACCOUNTING POLICIES**

 

## **Useof Estimates**

## ** **

Thepreparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires the Trustees to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expensesduring the reporting period.

 

17

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**Assets andLiabilities Transferred to the Trust**

 

The Company transferred thefollowing assets and liabilities to the Trust on June 28, 2002 (in thousands):

 

 

| Real Estate Held for Sale                                     |   | $       | 41,922 |   |
|---------------------------------------------------------------|--------|---------|--------|--------|
| Cash and Cash Equivalents                                     |   | 40,160  |   |
| Restricted Cash                                               |   | 734     |   |
| Receivables - Net                                             |   | 3,669   |   |
| Other Assets                                                  |   | 511     |   |
| Accounts Payable and Other  Liabilities                       |   | (2,786  | )      |
| Tenant Security Deposits                                      |   | (126    | )      |
| Notes Payable                                                 |   | (31,487 | )      |
| Reserve for Estimated  Costs during the Period of Liquidation |   | (9,187  | )      |
| Deferred Gain on Real  Estate Assets                          |   | (66     | )      |
| Net Assets in Liquidation                                     |   | $       | 43,344 |   |
|                                                               |        |         |        |        |  |

 

**IncomeTaxes**

 

The Trust was treated as agrantor trust and, accordingly, was not subject to federal or state income taxon any income earned or gain recognized by the Trust. The Trust recognizedtaxable gain or loss when an asset was disposed of for an amount greater orless than the fair market value of such asset at the time it was transferredfrom the Company to the Trust. Each Beneficiary of the Trust was treated as theowner of a pro rata portion of each asset, including cash, received by and heldby the Trust and was required to report on his or her federal and state incometax return his or her pro rata share of taxable income, including gains andlosses recognized by the Trust. Accordingly, there is no provision for federalor state income taxes in the accompanying financial statements.

 

**Real Estate and Real Estate Held for Sale**

 

The Trust did not own interestsin any real estate properties during the fiscal years ended December 31, 2005and 2004.

 

During the fiscal year endedDecember 31, 2003, the Trust sold Gateway Center (formerly known as Marin City)for aggregate proceeds of approximately $5,900,000 in cash. On September 29, 2003,the note on Simi Valley Plaza, the Trust’s sole remaining property, was sold,terminating the Trust’s ownership interest in the property.

 

During the period from June 28,2002 through December 31, 2002, the Trust sold the Central Shopping Center andthe Palms to Pines Shopping Center for aggregate proceeds of approximately$6,200,000 million in cash.

 

**Cash and Cash Equivalents**

 

For fiscal years ended December 31, 2005,2004, 2003 and 2002, for purposes of reporting cash flows, cash and cashequivalents include cash and certificates of deposit with original maturitiesof three months or less.

 

18

----

 

 

The restricted cashbalance (the “Deposited Funds”) at December 31, 2005 represents funds to beheld and administered by the Douglas Wilson Companies for a period of seven (7)years from the final distribution of the Trust and in accordance with the termsand conditions of the Administrative Services Agreement (See Exhibit 10.1).

 

Upon termination of theAdministrative Services Agreement, Douglas Wilson Companies shall promptly (andin any event within 10 business days) cause any remaining Deposited Funds to bedonated equally to the Red Cross and the Sidney Kimmel Cancer Foundation or, ifnone of such organizations are in existence at such time, a similar charitableorganization selected by the Douglas Wilson Companies.

 

## **Receivables -Net**

## ** **

AtDecember 29, 2005, the Trust did not have any receivables.

 

AtDecember 31, 2004, receivables were net of an allowance for doubtful accountsof approximately $808,000.

 

AtDecember 31, 2003, receivables were net of an allowance for doubtful accountsof approximately $4,248,000.

 

AtDecember 31, 2002, receivables were net of an allowance for doubtful accountsof approximately $5,872,000.

 

## **Financial Instruments**

## ** **

The carrying valuesreflected in the statements of net assets at December 31, 2005, 2004, 2003 and2002 reasonably approximated fair values for cash and cash equivalents,receivables, accounts payable and notes payable.

 

**Adjustmentto Deferred Gain on Real Estate Assets**

 

Adjusting assets toestimated net realizable value resulted in the write-up of certain real estateproperties. The anticipated gains associated with the write-up of these realestate properties were deferred until their sales. The amount of deferred gainon real estate assets transferred to the Trust on June 28, 2002 was $66,000.Upon the sale of the Palms to Pines Shopping Center in August 2002, the entireremaining amount of deferred gain on real estate assets was recognized.

 

**Reserve for EstimatedCosts During the Period of Liquidation (the “Reserve”)**

 

Under the liquidationbasis of accounting, costs associated with liquidating the Trust’s assets mustbe estimated and accrued in a reserve account. These amounts variedsignificantly due to, among other things, the costs of retaining personnel andone or more trustees to oversee the liquidation, the costs of litigation, thetiming and amounts associated with discharging fixed and contingent liabilitiesand the costs associated with cessation of the Trust’s operations.

 

19

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During the fiscal yearended December 31, 2005, the Trust made payments against the Reserve in theamount of $1,042,000 and wrote-off the remaining Reserve balance of $3,819,000.During the fiscal year ended December 31, 2004, the Trust made payments againstthe Reserve in the amount of $1,664,000 and reserved an additional $2,612,000,resulting in a December 31, 2004 Reserve balance of $4,861,000. During thefiscal year ended December 31, 2003, the Trust made payments against theReserve in the amount of $2,795,000 and reserved an additional $562,000,resulting in a December 31, 2003 Reserve balance of $3,913,000. During theperiod from June 28, 2002 through December 31, 2002, the Trust made paymentsagainst the Reserve in the amount of $3,041,000 resulting in a December 31,2002 Reserve balance of $6,146,000.

 

## **Revenue Recognition**

## ** **

Since the Trust adoptedthe liquidation basis of accounting, the method of straight-lining rentalrevenues over the life of the lease has not been utilized. Revenues based on apercentage of tenants’ sales were recognized when tenants’ sales exceeded theirsales breakpoint.

 

## **Net Income/(Loss) Per Unit**

## ** **

Net income/(loss) perUnit is calculated using the weighted-average number of Units outstanding atDecember 29, 2005, and December 31, 2004, 2003 and 2002, respectively. Thefollowing table shows the net income/(loss) per Unit computation for the fiscalyears ended December 31, 2005, 2004, and 2003 and for the period from June 28,2002 through December 31, 2002 (in thousands except per Unit amount):

 
| ** **                                                                | ** ** | **January 1,   2005   through   December 31,   2005** | ** ** | **January 1,   2004   through   December 31,   2004** | ** ** | **January 1,   2003   through   December 31,   2003** | ** ** | **June 28,   2002   through  December 31,   2002** | ** ** |
|---------------------------------------------------------------------------|------------|-------------------------------------------------------|------------|-------------------------------------------------------|------------|-------------------------------------------------------|------------|----------------------------------------------------|------------|
|                                                                      |       |                                                  |       |                                                  |       |                                                  |       |                                               |       |
| Net  Income/(Loss)                                                        |       | $                                                     | (288       | )                                                     | $          | (53                                                   | )          | $                                                  | 26         |   | $ | (372 | ) |
| Units Outstanding  at December 29, 2005, December 31, 2004, 2003 and 2002 |       | 32,928                                                |       | 32,928                                                |       | 32,928                                                |       | 32,928                                             |       |
|                                                                      |       |                                                  |       |                                                  |       |                                                  |       |                                               |       |
| Net  Income/(Loss) Per Unit                                               |       | $                                                     | (0.01      | )                                                     | $          | (0.00                                                 | )          | $                                                  | 0.00       |   | $ | (0.01 | ) |

 

## **Basis of Presentation**

## ** **

TheTrust adopted the liquidation basis of accounting. Under the liquidation basisof accounting, assets are stated at their estimated net realizable values andliabilities, including the reserve for estimated costs during the period ofliquidation, are stated at their anticipated settlement amounts.

 

**Reclassification**

 

Certain amounts in prioryear financial statements have been reclassified to conform to the 2005presentation.

 

20

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**3.****             ****REAL ESTATE AND REALESTATE HELD FOR SALE**

 

The Trust did not owninterests in any real estate properties at December 31, 2005, 2004 and 2003.

 

Real estate held for saleat December 31, 2002 was comprised entirely of interests in two retail shoppingcenters, Simi Valley Plaza and Gateway Center. At December 31, 2002, both ofthe properties were pledged as collateral for notes payable. In addition, thenotes payable are secured by assignments of rents on such real estate.

 

**4.****             ****NOTES PAYABLE**

 

The Trust did not owninterest in any real estate properties pledged as collateral for notes payableat December 31, 2005, 2004 and 2003. The notes payable were paid in full orsold during the fiscal year ended December 31, 2003.

 

Notes payable as ofDecember 31, 2002 consisted of the following:

 
| **Property**                                  | ** ** | **Principal  Balance  Outstanding  12/31/02** | ** **     | **Maturity Date** | ** **   | **Interest  Rate** | ** ** | **Annual  Payment** | ** ** |
|-----------------------------------------------|------------|-----------------------------------------------|----------------|-------------------|--------------|--------------------|------------|---------------------|------------|
| ** **                                    | ** ** | ** **                                    | ** **     | ** **        | ** **   | ** **         | ** ** | ** **          | ** ** |
| Gateway Center (formerly known as Marin City) |       | $                                             | 15,627,000     |              | October 2008 | (1)                | 7.39       | %                   | $          | 1,493,000 |   |
| Simi Valley Plaza                             |       | 15,622,000                                    |           | June 2026         |         | 8.98               | %          | 1,579,000           |       |
| **Total**                                     | ** ** | **$**                                         | **31,249,000** | ** **        | ** **   | ** **         | ** ** | ** **          | **$**      | **3,072,000** | ** ** |

 

----

(1)                                  Balloon payment at maturity.

 

**5.****             ****SALES OF REAL ESTATE**

 

During the period fromJune 28, 2002 through December 31, 2002, the Trust sold the Central ShoppingCenter and the Palms to Pines Shopping Center for aggregate proceeds ofapproximately $6,200,000 in cash.

 

**GatewayCenter**

 

During the fiscal yearended December 31, 2003, the Trust sold Gateway Center (formerly known as MarinCity and located in Marin City, California) for aggregate proceeds of$5,900,000 in cash.

 

21

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### ***SimiValley Plaza***

### * *

In late January 2002,House2Home, which occupied 113,932 square feet and operated under bankruptcyprotection, ceased paying rent at the Company’s Simi Valley Plaza shoppingcenter (the “Simi Property”). As a result, the Simi Property no longer producedenough cash income to make the required debt service payments to the lender andin June 2002, control of the Simi Property was transferred to a Receiver.

 

Although control of theSimi Property had been undertaken by a Receiver, BPP/Simi Valley, L.P., a“Bankruptcy Remote Entity,” which was an indirect subsidiary of the Trust,continued to hold fee title to the Simi Property.

 

In August 2003, the Trustnegotiated and received a payment of $400,000 in consideration for nottransferring its interest in the Simi Property during negotiations relating tothe sale of the note (the “Note”) on the Simi Property. In September 2003, theTrust was informed that the holder of the Note sold the Note to an outsidethird party, and the buyer of the Note subsequently sold the Simi Property,through auction, on September 29, 2003.

 

The sale of the SimiProperty terminated the Trust’s ownership interest in the property. At the timethe Simi Property was transferred to the Receiver, the Trust wrote down its netrealizable value to the mortgage amount. Accordingly, the only impact on thefinancial operations of the Trust related to the sale of the Simi Property wasthe receipt of the $400,000 fee described above.

 

**6.****             ****LIQUIDATING DISTRIBUTIONS**

 

During the life of theTrust from June 28, 2002 through December 29, 2005, the Trust made liquidatingdistributions in the aggregate amount of $1.4167 per Unit.

 

On December 29, 2005, theTrust made the final liquidating distribution in the amount of $5,490,000($0.1667 per Unit). During the fiscal year ended December 31, 2005, the Trustalso made liquidating distributions to the Beneficiaries of $1,646,500 ($0.05per Unit) on March 7, 2005 and $1,646,500 ($0.05 per Unit) on August 31, 2005, fora cumulative liquidating distribution of $8,783,000 ($0.2667 per Unit) for thefiscal year ended December 31, 2005.

 

During the fiscal yearended December 31, 2004, the Trust made a liquidating distribution to theBeneficiaries of $4,940,000 ($0.15 per Unit) on March 31, 2004.

 

During the fiscal yearended December 31, 2003, the Trust made liquidating distributions to theBeneficiaries of $9,880,000 ($0.30 per Unit) on August 15, 2003, $3,293,000($0.10 per Unit) on October 15, 2003 and $3,293,000 ($0.10 per Unit) onDecember 15, 2003, for a cumulative liquidating distribution of $16,466,000($0.50 per Unit) for the fiscal year ended December 31, 2003.

 

During the period fromJune 28, 2002 through December 31, 2002, the Trust made a liquidatingdistribution to the Trust’s Beneficiaries in the aggregate amount of$16,466,000 ($0.50 per Unit).

 

22

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**7.****             ****TRANSACTIONS WITHRELATED PARTIES**

 

In February 2002, theCompany sold its interest in the Lake Arrowhead Village shopping center to LAV,LLC, an entity in which Scott C. Verges, a co-trustee of the Trust, is amember. Under the Purchase and Sale Agreement, Scott C. Verges agreed to repaythe Company $877,000 for construction and other credits in 30 equal non-interestbearing monthly installments. As of December 31, 2004, the balance was paid infull.

 

The Trust has engaged MBVLaw, formerly known as Mandel Buder & Verges, for legal services. Scott C.Verges, a co-trustee, is a non-equity employee of MBV Law. Legal expenses,including litigation consultant fees, paid to MBV Law for the fiscal year endedDecember 31, 2005 were approximately $598,000. Legal expenses paid to MBV Lawfor the fiscal year ended December 31, 2004 were approximately $617,000, forthe fiscal year ended December 31, 2003 were approximately $347,000 and for theperiod from June 28, 2002 through December 31, 2002, were approximately$141,000.

 

Douglas P. Wilson, eitherdirectly or indirectly through the Douglas Wilson Companies, receivedapplicable fees specified in the Liquidating Trust Agreement. The DouglasWilson Companies was paid approximately $483,000 for services rendered for thefiscal year ended December 31, 2005, $373,000 for services rendered for thefiscal year ended December 31, 2004, $695,000 for services rendered for thefiscal year ended December 31, 2003 and $211,000 for services rendered for theperiod from June 28, 2002 through December 31, 2002. In consideration forservices under the Administrative Services Agreement, Douglas Wilson Companieswas paid a fee of $100,000 out of the assets of the Trust concurrently with theexecution and delivery of the Administrative Services Agreement.

 

**8.****             ****OPERATING LEASES**

 

The Trust did not incurany expense for office space for the fiscal year ended December 31, 2005.

 

The Trust paidapproximately $9,000 for office space for the fiscal year ended December 31,2004 and $23,650 for the fiscal year ended December 31, 2003. Office rentalexpense, net of related sub-lease income for the period from June 28, 2002through December 31, 2002, was approximately $3,150.

 

23

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**9.****             ****CONTINGENCIES**

 

**LakeArrowhead Village**

 

In April 2001, a lawsuitwas filed in the Superior Court of the State of California, County of Orange,by eleven tenants at the Company’s former Lake Arrowhead Village property (the“Arrowhead Property”). The lawsuit was filed against the Company, the immediateformer owner of the property who had contributed the property to the Company,as well as against all of the individual and corporate managers and managementcompanies of the property during the periods of the tenants’ leases. Thecomplaint alleged, among other things, breach of contract, fraud, intentionalmisrepresentation and unfair business practices, and it alleged that theCompany overcharged these tenants for common area maintenance (“CAM”). Thislawsuit was resolved in June 2002 after the Company made a statutory offer toallow a compromise judgment to be entered against the Company in the amount of$300,000.

 

On January 17, 2003, thesame eleven tenants who filed the aforementioned lawsuit in Orange CountySuperior Court, together with eight other tenants at the Company’s formerArrowhead Property, filed a lawsuit in the Superior Court of the State ofCalifornia, County of San Bernardino. The lawsuit was filed against theCompany, the Trust, the Trustees, Scott C. Verges individually, LAV, LLC (thecompany that purchased the property from the Company in February 2002), theformer owner of the property who had contributed the property to the Company,and many of the individual and corporate managers and management companies ofthe property during the periods of the tenants’ leases. LAV, LLC, is an entityin which Scott C. Verges, a co-trustee of the Trust, is a member. (See “Item 13- Certain Relationships and Related Transactions”).

 

On March 10, 2003, thelawsuit was removed to the United States District Court for the CentralDistrict of California, Eastern Division. However, the tenants/plaintiffsvoluntarily dismissed their RICO claim whereupon the lawsuit was sent back tothe San Bernardino Superior Court. By motion practice which occurred over aperiod of eight months, six claims from the complaint and amendments theretohave been dismissed with prejudice (namely, false statement against realty,intentional interference with prospective business advantage, negligentinterference with business advantage, waste, breach of the implied covenant offair dealing and impress and foreclose equitable liens). In between amendmentsof the complaint, one plaintiff (who was also a plaintiff in the earlierlawsuit) dropped out of the lawsuit. In addition, two additional plaintiffs(who were both tenants under one lease) subsequently dropped out and one plaintiffwas added. The plaintiffs’ final complaint alleged, among other claims, breachof contract, fraud, intentional misrepresentation and unfair businesspractices, and it alleged that the Company overcharged these tenants for CAM.

 

Effective August 1, 2005,the Trust and all of the other parties to the lawsuit entered into a settlementagreement which disposed of all claims asserted in the lawsuit and all knownand unknown claims between the plaintiffs and the defendants, including theTrust. On August 9, 2005, at the request of the parties, the Court ordered thecase dismissed, but retained limited jurisdiction for the purpose of enforcingthe terms of the settlement agreement. The Trust made aggregate settlementpayments, net of payments made by its insurer, equal to $270,000 to theplaintiffs. The settlement agreement also includes mutual covenants not to sueand mutual releases of all known and unknown claims among the parties.

 

24

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In conjunction with theabove described litigation, on February 4, 2003, the Trust, through its broker,Marsh Risk & Insurance Services, tendered the complaint in the UnderlyingAction to American International Specialty Lines Insurance Company (“AISLIC”)under the Directors, Officers and Corporate Liability Insurance Policy for RealEstate Investment Trusts, Policy No. 473-95-69 (the “Policy”) issued by AISLICto the Company for the period from December 15, 2000 to December 15, 2002. ThePolicy provided a $20,000,000 aggregate limit of liability, and a $150,000retention for judgments, settlements and defense costs for nonsecuritiesclaims. The Policy required AISLIC to advance defense costs of any coveredclaim prior to its final disposition. On March 25, 2004, AISLIC acknowledged inwriting that the Company, BPP/Arrowhead, L.P., BPP/Arrowhead, Inc., and BurnhamPacific Operating Partnership, L.P. were covered under the Policy, as well ascertain individuals who were directors and/or officers of the Company. AISLICdeclined coverage for the Trust and individuals who were sued in their capacityas Trustees for the Trust. AISLIC paid defense and settlement costs ofBPP/Arrowhead, L.P., BPP/Arrowhead, Inc. and Burnham Pacific OperatingPartnership, L.P., subject to certain limitations, in the amount ofapproximately $1,263,000.

 

**DevelopersDiversified Realty**

 

The Trust was involved inlegal proceedings with Developers Diversified Realty Corporation (“DDRC”) andDDR Real Estate Services, Inc. (“DDRRES”), an affiliate of DDRC which acted asthe Company’s liquidator and property manager for the period from December 15,2000 through June 27, 2002.

 

On January 10, 2003,DDRRES filed a lawsuit against the Company and Trust in the Supreme Court ofthe State of New York, Monroe County. DDRRES’ lawsuit alleged breach ofcontract and related claims arising from the liquidation and propertymanagement services that DDRRES was to perform. DDRRES’ lawsuit sought monetarydamages of approximately $98,000 and a judicial declaration that DDRRES is entitledto retain construction management fees obtained from the Company in the amountof approximately $530,000. The trial court dismissed the lawsuit for lack ofjurisdiction in August 2003. DDRRES appealed the trial court’s decision. InNovember 2004, the New York appellate court issued a unanimous written opinionaffirming the trial court’s decision.

 

The Trust, acting throughits Trustees, filed a lawsuit on January 13, 2003, against DDRRES in theSuperior Court of the State of California, County of Contra Costa, based onDDRRES’ acts and omissions as the Company’s liquidator and property manager.The lawsuit, which the Trust amended in 2004 to add DDRC as an additionaldefendant, alleged breach of contract, breach of fiduciary duty, negligence,unfair business practices and related claims. DDRRES and DDRC filed across-complaint in 2004 seeking monetary damages of approximately $98,000 fornon-payment of asset management fees.

 

On July 25, 2005, theTrust, DDRC, and DDRRES agreed to settle this litigation and the Superior Courtentered a settlement agreement into the record. Under the terms of thesettlement agreement, DDR made a $700,000 cash payment to the Trust on August24, 2005. The settlement agreement also included a mutual release of all claimsbetween the parties.

 

25

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**RVIP andSparks, Inc.**

 

The Trust was alsoinvolved in legal proceedings arising from a sale by the Company of a shoppingcenter in Richmond, California, to Prudential Real Estate Investors, DDRC andCoventry Partners (collectively, “RVIP”) in April 2001. Sparks, Inc. (“Sparks”)is a restaurant tenant at the shopping center. In April 2004, Sparks filed anaction in the Superior Court of the State of California, County of Contra Costa,against RVIP and the Trust for damages and specific performance. Sparks soughtto enforce an option to purchase the restaurant premises. As to the Trust,Sparks sought unspecified damages for breach of a retail lease and breach ofthe implied covenant of good faith and fair dealing. In August 2004, the Trustfiled a cross-complaint for indemnity against RVIP. In December 2004, the Trustfiled an answer to Sparks’ complaint that denied all of Sparks’ liability anddamages claims. The Trust also filed a motion for summary judgment.

 

In March 2005, RVIP andSparks entered into a settlement that included a payment of $30,000 from theTrust to Sparks in exchange for a release and dismissal of all claims.

 

ITEM 9.                                                     CHANGES IN AND DISAGREEMENTS WITHACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 

None.

 

ITEM 9A.                                           CONTROLS AND PROCEDURES.

 

Not applicable.

 

ITEM 9B.                                             OTHER INFORMATION.

 

None.

 

26

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**PART III**

 

ITEM 10.                                               DIRECTORS AND EXECUTIVE OFFICERS OF THEREGISTRANT.

 

**Information Regarding theTrustees**

 

The following table andbiographical descriptions set forth certain information with respect to theTrustees. There is no family relationship between either Trustee of the Trust.

 

 
| **Name**          | ** ** | **Age** | ** ** | **Position Held** |
|-------------------|------------|---------|------------|-------------------|
|              |       |    |       |              |
| Scott C. Verges   |       | 52      |       | Co-Trustee        |
| Douglas P. Wilson |       | 55      |       | Co-Trustee        |

 

The principal occupation for the last five years ofeach of the Trustees, as well as other related information, is set forth below.

 

**Trustee Biographies**

 

SCOTT C. VERGES became a co-trustee of the Trust onJune 28, 2002. From December 15, 2000 through June 27, 2002, Mr. Verges wasChief Executive Officer and President of the Company. Prior to that time, Mr.Verges was General Counsel of the Company since January 1999 and ChiefAdministrative Officer since May 1999, and Interim Chief Executive Officer andInterim President since August 18, 2000. Since June 1997, Mr. Verges has beenassociated with the law firm of MBV Law (formerly known as Mandel Buder &Verges). Prior to his association with MBV Law, Mr. Verges was a principal inthe law firm of Cassidy & Verges, which he co-founded in 1990. Mr. Vergesreceived his J.D. in 1980 from Boalt Hall School of Law at the University ofCalifornia, Berkeley and is currently an instructor of Real Estate in the MBAprogram at Mills College, located in Oakland, California.

 

DOUGLAS P. WILSON becamea co-trustee of the Trust on June 28, 2002.  In 1989, Mr. Wilson foundedthe Douglas Wilson Companies, which provides a wide range of specializedbusiness, workout, and real estate services to law firms, State and Federalcourts, corporations, partnerships, pension funds, REITs, financialinstitutions, and property owners throughout the United States. With offices inSan Diego, San Francisco, Denver and Atlanta, the company is the largestbusiness services entity of its kind in the United States, providing workoutsand problem resolution, asset management, consulting, business planning,receiverships, development, and construction management services. To date, thecompany has provided court appointed fiduciary services for more than 450matters in excess of $4 billion. The company also has an active real estatedevelopment division, which in 2002 completed the $60 million ParkLoftcondominium complex in San Diego’s East Village and is now developing acompanion property, The Mark, a $155 million, 33-story condominium tower.

 

**Compliancewith Section 16(a) of the Exchange Act**

 

Not applicable.

 

27

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**Code ofEthics**

 

The Trust did not adopt acode of ethics in accordance with Item 406 of Regulation S-K because the Trustdid not have any executive officers.

 

ITEM 11.                                               TRUSTEE COMPENSATION.

 

**Trustees**

 

Pursuant to Section 9.1of the Liquidating Trust Agreement, in lieu of commissions or othercompensation fixed by law for trustees, the co-trustees are entitled to thefollowing compensation:

 

MR. VERGES. Mr. Vergesreceived an hourly rate of $500 for services rendered as co-trustee. Forservices rendered for the fiscal year ended December 31, 2005, Mr. Verges waspaid approximately $131,000, for the fiscal year ended December 31, 2004, hewas paid approximately $93,000, for the fiscal year ended December 31, 2003, hewas paid approximately $241,000 and for the period from June 28, 2002 throughDecember 31, 2002, he was paid approximately $148,000. Mr. Verges also receivesreimbursement for reasonable out-of-pocket expenses, which does not includeadministrative expenses.

 

MR. WILSON. Mr. Wilson, either directly or indirectly through the DouglasWilson Companies, received applicable fees specified in the Liquidating TrustAgreement; provided, however, that such fees for base services shall not exceedin any particular month (1) $30,000 for the six-month period commencing June28, 2002; (2) $25,000 for the two-month period immediately following suchsix-month period; (3) $22,500 for the two-month period following such two-monthperiod; and (4) $20,000 thereafter and for the duration of the term of theTrust. Pursuant to the Liquidating Trust Agreement, the Trust also paid theDouglas Wilson Companies $62,500 for services rendered in connection with theTrust prior to June 28, 2002. The Douglas Wilson Companies also receivesreimbursement for reasonable out-of-pocket expenses (which do not includeoccupancy costs and administrative expenses), including additional personnelthat are needed to assist in matters of litigation support, common areamaintenance reconciliations and tenant resolution issues. For services renderedfor the fiscal year ended December 31, 2005, the Douglas Wilson Companies waspaid approximately $483,000, which included $154,000 for base services,$270,000 for litigation support, including Lake Arrowhead litigationsupervision which involved Scott C. Verges and other former officers of theCompany, $50,000 for audit support services and $9,000 for costs associatedwith accounts receivable collections and tenant related issues. For servicesrendered for the fiscal year ended December 31, 2004, the Douglas WilsonCompanies was paid approximately $373,000, which included $128,000 for baseservices, $219,000 for litigation support, including Lake Arrowhead litigationsupervision which involved Scott C. Verges and other former officers of theCompany, and $26,000 for costs associated with accounts receivable collectionsand tenant related issues. For services rendered  for the fiscal year ended December 31, 2003,the Douglas Wilson Companies was paid approximately $695,000, which included$202,000 for base services, $376,000 for litigation support, including LakeArrowhead litigation supervision which involved Scott C. Verges and otherformer officers of the Company, and $117,000 for costs associated with accountsreceivable collections and tenant related issues. For services rendered for theperiod from June 28, 2002 through December 31, 2002, the Douglas WilsonCompanies was paid approximately $211,000, which included $141,000 for baseservices, $58,000 for litigation support, including 

 

28

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Lake Arrowhead litigation supervision which involved Scott C. Vergesand other former officers of the Company, and $12,000 for costs associated withaccounts receivable collections and tenant related issues. As described in Item13, in consideration for its services under the Administrative ServicesAgreement, Douglas Wilson Companies was paid a fee of $100,000 out of theassets of the Trust concurrently with the execution and delivery of theAdministrative Services Agreement.

 
| ITEM 12. | SECURITY OWNERSHIP OF  CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED BENEFICIARY MATTERS. |
|----------|--------------------------------------------------------------------------------------------------|

 

**Principal Beneficiaries**

 

There is no public marketfor the Units of the Trust. On June 27, 2002, the Company formally closed itsstock transfer books and its Common Stock was delisted from the New York StockExchange. On June 28, 2002, the Company filed a Form 15 with the SEC toterminate the registration of its Common Stock under the Exchange Act and itsobligation to file periodic reports with respect thereto. The Units were nottransferable except by will, intestate succession or operation of law.

 

The following table setsforth the beneficial ownership of Units as to (i) each Beneficiary that isknown by the Trust to have beneficially owned more than five percent of theUnits as of December 31, 2005; and (ii) each of the Trustees as of December 31,2005, based on representations of the Trustees and filings through December 31,2005 received by the Trust on Schedule 13G under the Securities Exchange Act of1934, as amended (the “Exchange Act”). All percentages have been calculated asof and are based upon 32,928,220 Units outstanding at the close of business onsuch date. Each person in the table below has indicated that it has sole votingand investment power over the Units listed.

 
| **Name and Address of Beneficial  Owner** | ** ** | **Number of   Units** | ** ** | **Percent of   Class (%)** | ** ** |
|-------------------------------------------|------------|-----------------------|------------|----------------------------|------------|
| Scott C. Verges (1)                       |       | 12,000                |       | *                          |       |
|                                      |       |                  |       |                       |       |
| Douglas P. Wilson (1)                     |       | 0                     |       | *                          |       |
|                                      |       |                  |       |                       |       |
| All Trustees as a group (2 persons)       |       | 12,000                |       | *                          |       |
|                                      |       |                  |       |                       |       |
| Double Play Partners Limited Partnership  |       | 3,787,000             | (2)        | 11.5                       |       |
| 1391 Main St.                             |       |                  |       |                       |       |
| Springfield, MA  01103                    |       |                  |       |                       |       |

 

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*                                         Less than one percent

(1)                               Address of each Trustee is c/o BPPLiquidating Trust, 450 B Street, Suite 1900, San Diego, CA  92101

(2)                               Information reported is based upon aSchedule 13G filed with the SEC on February 14, 2003 reporting beneficialownership as of December 31, 2002.

 

As of December 31, 2005,the Trust did not have any compensation plans under which equity securities areauthorized for issuance.

 

29

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ITEM 13.                                               CERTAIN RELATIONSHIPS AND RELATEDTRANSACTIONS.

 

**Relationshipwith MBV Law**

 

Legal expenses paid to MBV Law, includinglitigation consultant fees, for the fiscal year ended December 31, 2005 were approximately$598,000. Legal expenses paid to MBV Law for the fiscal year ended December 31,2004 were approximately $617,000, for the fiscal year ended December 31, 2003were approximately $347,000 and for the period from June 28, 2002 throughDecember 31, 2002 were approximately $141,000. Mr. Verges, a co-trustee, is anon-equity employee of MBV Law and is entitled to devote a certain percentageof his time to providing services to MBV Law pursuant to the terms of hisagreement with the Trust. Prior to becoming Chief Executive Officer of theCompany, Mr. Verges received up to approximately 10% of the gross revenuesreceived by MBV Law from Mr. Verges’ clients, including the Company. Subsequentto Mr. Verges becoming Chief Executive Officer of the Company, no portion ofhis compensation from MBV Law has been related to revenues received by MBV Lawfrom the Company and/or Trust.

 

**LakeArrowhead Village**

 

On February 22, 2002, theCompany sold its interest in the Lake Arrowhead Village shopping center to LAV,LLC, an entity in which Scott C. Verges, a co-trustee of the Trust, is amember, for a net purchase price of approximately $19.1 million. Under thePurchase and Sale Agreement and Joint Escrow Instructions, dated as of November26, 2001, as subsequently amended on February 12, 2002, (1) LAV, LLC agreed toassume all of the outstanding mortgage indebtedness secured by the asset insatisfaction of the payment of the purchase price, (2) the Company agreed toadvance $2 million (the “Construction Credit”) into an escrow account to becontrolled by the mortgage lender from which LAV, LLC drew the entire amountwhich was necessary to fund the costs of significant structural repairs to thecenter’s seawall and parking garage, and (3) Scott C. Verges agreed to repay a$500,000 portion of the Construction Credit advance and $377,000 of certainother credits in 30 equal non interest-bearing monthly installments. As ofDecember 31, 2004, the balance was paid in full. The $19.1 million ofoutstanding mortgage indebtedness assumed by LAV, LLC bears interest at anannual rate of 9.20%, matures in 2011 and cannot be prepaid until 2011. Mr.Verges also separately agreed to forfeit all severance benefits, which wouldhave cost the Company an aggregate of approximately $2.4 million, which heotherwise would have been entitled to receive no later than January 15, 2002.

 

**Administrative Services Agreement**

 

On December 21, 2005, theTrustees of the Trust entered into an Administrative Services Agreement withDouglas Wilson Companies (the “Agent”). The Administrative Services Agreementprovides for the appointment of the Agent as the Trustees’ agent to take suchactions as the Agent deems necessary or appropriate to fulfill or cause to befulfilled the obligations of the Trust and the Trustees following the date onwhich the Trust was terminated, including, without limitation, retaining thebooks, records and other files in the possession of the Trustees as of the dateof termination, and responding to any requests, notices, claims, or actionsrelating to the Trust that may arise or first become known after the date oftermination. In consideration for its services under the Agreement, Agent waspaid a fee of $100,000 out of the assets of the Trust concurrently with theexecution and delivery of the Administrative Services Agreement.

 

30

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ITEM 14.                                               PRINCIPAL ACCOUNTANT FEES AND SERVICES.

 

Prior to 2005, the Trustdid not employ any independent public accounting firm. During the fiscal year 2005,the Trust employed an independent registered public accounting firm, J.H. CohnLLP, to provide review services in accordance with Statements on Standards forAccounting and Review Services issued by the American Institute ofCertified Public Accountants for the approximate amount of $61,000.

 

31

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**PARTIV**

 
| ITEM 15. | EXHIBITS.                      |
|----------|--------------------------------|
|     |                           |
| (a)      | FINANCIAL STATEMENT  SCHEDULES |
|     |                           |
|     | None.                          |
|     |                           |
| (b)      | EXHIBITS                       |

 
| 2.1    |   | Plan of Complete  Liquidation and Dissolution (incorporated by reference to Appendix A to the  Company’s Proxy Statement for its 2000 Annual Meeting of Stockholders, filed  on November 28, 2000).                                                                                                       |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                           |
| 2.2    |   | Liquidating Trust  Agreement, dated as of June 28, 2002, between the Company, and Scott C.  Verges and Douglas P. Wilson, not in their individual capacities but as  trustees of the BPP Liquidating Trust (incorporated by reference to Exhibit  99.1 to the Company’s Form 8-K filed on June 28, 2002). |
|   |   |                                                                                                                                                                                                                                                                                                           |
| 10.1   |   | Administrative Services  Agreement, dated as of December 21, 2005, between the Trust, and Scott C.  Verges and Douglas P. Wilson, not in their individual capacities but as  trustees of the BPP Liquidating Trust (included herewith as Exhibit 10.1).                                                        |
|   |   |                                                                                                                                                                                                                                                                                                           |
| 21.1   |   | Subsidiaries of the  Trust                                                                                                                                                                                                                                                                                     |

 

32

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SIGNATURES

 

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

 
|   | BPP Liquidating Trust |
|--------|-----------------------|
|   |                  |
|   | By:                   |  /s/ Scott C. Verges |   |
|   | Scott C. Verges       |
|   | Co-Trustee            |
|   |                  |
|   | Dated:                |  March 1, 2006 |   |
|        |                       |  |  |  |

 

SIGNATURES

 

Pursuant to therequirements of the Securities Exchange Act of 1934, this report has beensigned below by the following persons on behalf of the Registrant and in thecapacities and on the dates indicated.

 
| Signature             |   | Title      |   | Date          |   |
|-----------------------|--------|------------|--------|---------------|--------|
|                  |   |       |   |          |   |
| /s/ Scott C. Verges   |   |       |   |          |   |
| Scott C. Verges       |   | Co-Trustee |   | March 1, 2006 |   |
|                  |   |       |   |          |   |
| /s/ Douglas P. Wilson |   |       |   |          |   |
| Douglas P. Wilson     |   | Co-Trustee |   | March 1, 2006 |   |

 

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