** **

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-K**

 

| **ý**  **Annual report pursuant to  Section 13 or 15(d) of the Securities Exchange Act of 1934** |
|------------------------------------------------------------------------------------------------------------|
|                                                                                                       |   |   |
| **For the period from June 28, 2002  to December 31, 2002**                                                |   | **Commission file number 1-9524*** |

 

| **BPP LIQUIDATING 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.) |
|                                                                         |   |                               |
| **3633  Camino Del Rio South, Suite 205, San Diego, California**             |   | **92108**                          |
| (Address of principal  executive offices)                                    |   | (Zip Code)                         |
|                                                                         |   |                               |
| **(619)  652-4700**                                                          |
| 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** |
|                                                                         |

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Indicate by check mark whether the Registrant: (1) has filed allreports required to be filed by Section 13 or 15(d) of the Securities ExchangeAct of 1934 during the preceding 12 months (or for such shorter period that theRegistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days.

YESoNOo

Not applicable. Reference is made to the Form 15 filed on June 28, 2002.

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Indicate by check mark if disclosure of delinquent filers pursuant toItem 405 of Regulation S-K is not contained herein, and will not be contained,to the best of Registrant’s knowledge, in definitive proxy or informationstatements incorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K.  

Not applicable.

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Indicate by check mark whether the Registrant is an accelerated filer(as defined in Exchange Act Rule 12b-2). YES o NO ý

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State the aggregate market value of the voting and non-voting commonequity held by non-affiliates.

Not applicable.

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DOCUMENTS INCORPORATED BYREFERENCE

None

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*BPP Liquidating Trust is the transferee of the assets and liabilitiesof Burnham Pacific Properties, Inc., and files reports under Burnham PacificProperties, Inc.’s former Commission file number.  Burnham Pacific Properties, Inc. filed a Form 15 on June 28,2002, indicating its notice of termination of registration and filingrequirements.

 

 

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**PART I**

 
| ITEM 1. |   | BUSINESS. |
|---------|--------|-----------|

 

**Liquidationof Burnham Pacific Properties, Inc.**

 

On August 31, 2000, the Board of Directors of Burnham PacificProperties, Inc. (the “Company”) adopted a Plan of Complete Liquidation andDissolution (the “Plan of Liquidation”) and directed that the Plan ofLiquidation be submitted to the Company’s stockholders for approval.  Thestockholders of the Company subsequently approved the Plan of Liquidation atthe 2000 Annual Meeting of Stockholders held on December 15, 2000.

 

The Plan of Liquidation contemplated the orderly sale of all of theCompany’s assets for cash or such other form of consideration as may beconveniently distributed to the Company’s stockholders and the payment of (orprovision for) the Company’s liabilities and expenses, as well as theestablishment of reserves to fund the Company’s contingent liabilities.  The Plan of Liquidation gave the Company’sBoard of Directors the power to sell any or all of the assets of the Companywithout further approval by the stockholders and required that the finalliquidating distribution, either directly to stockholders or to a liquidatingtrust, be made no later than December 15, 2002.

 

On June 28, 2002, the Company transferred its remaining assets to (andits remaining liabilities were assumed by) the co-trustees of the BPPLiquidating Trust (the “Trust”), Scott C. Verges and Douglas P. Wilson (the“Trustees”), in accordance with the Company’s Plan of Liquidation, and theCompany was dissolved.  The last day oftrading of the Company’s common stock on the New York Stock Exchange was June27, 2002 (the “Record Date”), and the Company’s stock transfer books wereclosed as of the close of business on that date.  In addition, on June 28, 2002 the Company filed a Form 15 withthe Securities and Exchange Commission (the “SEC”) to terminate theregistration of the Company’s common stock under Section 12(b) of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”), and itsobligation to file periodic reports. The Company had previously received a “No-Action” letter from the SECregarding the Exchange Act reporting obligations of the Trust.

 

During the period of liquidation from December 16, 2000 through June27, 2002, the Company assigned, sold or otherwise disposed of all of its realestate assets except its interests in four shopping centers:  Palms to Pines shopping center, Centralshopping center, Simi Valley Plaza and Gateway Center (formerly known as MarinCity).

 

Under the terms of the Liquidating Trust Agreement executed by theCompany and the Trustees on June 28, 2002, each stockholder of the Company onthe Record Date (each, a “Beneficiary”) automatically became the holder of oneunit of beneficial interest (a “Unit”) in the Trust for each share of Companycommon stock then held of record by such stockholder, and all outstandingshares of Company common stock were automatically deemed cancelled.  Stockholders of the Company on the RecordDate were not required to take any action to receive their Units.  The rights of Beneficiaries in their Unitsare not represented by any form of certificate or other instrument. The Trust’sagent maintains a record of the name and address of each Beneficiary

 

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and such Beneficiary’s aggregate Units in the Trust.  Subject to limited exceptions related totransfer by will, intestate succession or operation of law, the Units are nottransferable.

 

The Trust was established for the sole purpose of winding up theCompany’s affairs and the liquidation of its assets with no objective tocontinue or engage in the conduct of a trade or business or cause anysubsidiary to continue or engage in the conduct of a trade or business, exceptas necessary for the orderly liquidation of the Trust’s assets.

 

The Trust will terminate upon the earliest of (1) such time astermination is required by the applicable laws of the State of Maryland, (2)the distribution of all the Trust’s assets in accordance with the terms of theLiquidating Trust Agreement, or (3) the expiration of a period of three yearsfrom the date assets were first transferred to the Trust.  The existence of the Trust may, however, beextended to such later date as the Trustees may designate if they determinethat an extension is reasonably necessary to fulfill the purpose of the Trustand, prior to such extension, the Trustees shall have requested and receivedadditional No-Action assurances from the SEC.

 

**TaxTreatment**

 

The Trust will issue an annual information statement to theBeneficiaries with tax information for their tax returns.  Beneficiaries are urged to consult withtheir own tax advisors as to their own filing requirements and the appropriatetax reporting of this information on their returns.

 

**Reportsto Beneficiaries; Meetings**

 

The Trustees are expected to issue annual reports to the Beneficiariesshowing the assets and liabilities of the Trust at the end of each fiscal yearand the receipts and disbursements of the Trust for the period. The annualreports will also describe the changes in the Trust’s assets during thereporting period and the actions taken by the Trustees during the period. TheTrustees are also required to file with the SEC (1) an annual report on Form10-K and (2) whenever a material event relating to the Trust occurs, a currentreport on Form 8-K.

 

Generally, there will be no meetings of the Beneficiaries.  However, the Trustees may at any time call ameeting of the Beneficiaries to be held at such time and at such place as theTrustees shall determine.  In addition,holders of at least a majority of the aggregate Units held by all Beneficiariesmay require the Trustees to call a meeting of the Beneficiaries.  A Trustee may be removed at any time, withcause, by Beneficiaries having aggregate Units of at least a majority of thetotal Units held by all Beneficiaries. Any Trustee may be removed at any time, without cause, by Beneficiarieshaving aggregate Units of at least two-thirds of the total Units held by allBeneficiaries.

 

**Distributions**

 

During the period from June 28, 2002 through December 31, 2002, theTrust made a liquidating distribution to the Beneficiaries of $0.50 perUnit.  The Trustees estimate that theTrust will make future aggregate cash distributions of approximately $0.75 perUnit based upon estimated

 

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net proceeds from the sale of remaining real estate, the estimatedtiming of such sale, collection of receivables, amounts required to settleliabilities, the levels of reserves deemed necessary or appropriate for knownand unknown liabilities, and other considerations.  Because the estimate of additional cash distributions is based onvarious assumptions and projections, there can be no assurance that the actualamount of distributions will not differ materially from the Trustees’ estimate.

 

**PropertySales**

 

During the period from June 28, 2002 through December 31, 2002, theTrust sold Central and Palms to Pines shopping centers for aggregate proceedsof approximately $6.2 million in cash.

 

**Employees**

 

The Trust has no full-time employees. From time to time, the Trust engages one or more former employees of theCompany on an hourly basis to perform administrative functions on behalf of theTrust.

 
| ITEM 2.  |   | RETAIL PROPERTIES. |
|---------------|--------|--------------------|

 

On December 31, 2002, the Trust owned interests in two properties, SimiValley Plaza and Gateway Center (formerly known as Marin City).  The following table sets forth the operatingproperties owned by the Trust at December 31, 2002.

** **
| **Property**                             |   | **Percent  Owned** |       | **Trust-Owned  GLA  (square feet)** |       | **Total  Occupancy** |       | **Principal Tenants  (Lease Expiration Date)** |       |
|------------------------------------------|--------|--------------------|------------|-------------------------------------|------------|----------------------|------------|------------------------------------------------|------------|
|                                     |   |               | ** ** |                                | ** ** |                 | ** ** |                                           | ** ** |
| Simi Valley Plaza(1)

*Simi Valley,  CA* |   | 100%               |       | 216,682                             |       | 41.21%               |       | Edwards Theaters (12/31/03)  (2)               |       |
|                                     |   |               |       |                                |       |                 |       |                                           |       |
| Gateway Center                           |   | 100%               |       | 182,030                             |       | 93.70%               |       | Best Buy (1/31/19) (3)                         |       |
| *Marin City,  CA*                        |   |               |       |                                |       |                 |       | Ross Dress for Less (1/31/07)  (3)             |       |
|                                     |   |               |       |                                |       |                 |       | Long’s Drugs (2/28/22)                    |       |
|                                     |   |               |       |                                |       |                 |       | Linens N Things (1/31/11) (3)                  |       |
|                                     |   |               |       |                                |       |                 |       | Outback Steakhouse (12/31/08)                  |       |

 

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| (1) |   | In receivership, see “Item 2 – Retail Properties -  Simi Valley Plaza.”  All information  contained herein regarding Simi Valley Plaza has been provided to the Trust  by the Receiver. |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |   | Edwards Theaters has filed for bankruptcy.                                                                                                                                                                  |
| (3) |   | Accounted for 10% or more of total revenues of the  Trust.                                                                                                                                                  |

 

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**Simi Valley Plaza**

 

In late January 2002, House2Home, which occupied 113,932 square feetand operated under bankruptcy protection, ceased paying rent at the Company’sSimi Valley Plaza shopping center.  As aresult, the property no longer produced enough cash income to make the requireddebt service payments to the lender and control of the property was transferredto a Receiver pursuant to the certain Stipulation for Order re: Appointment ofReceiver and Issuance of Preliminary Injunction; Order Thereon, dated June 25,2002, BPP/Simi Valley, L.P. entered in the action captioned LaSalle Bank, N.A.v. BPP/Simi Valley, L.P., et al., Case No. SC033169 pending in the SuperiorCourt of the State of California for the County of Ventura.

 

Although control of the shopping center has been undertaken by aReceiver, BPP/Simi Valley, L.P. continues to hold fee title to Simi ValleyPlaza.  Simi Valley Plaza shoppingcenter is owned by BPP/Simi Valley, L.P., a “Bankruptcy Remote Entity,” whichis an indirect subsidiary of the Trust. The assets owned by BPP/Simi Valley, L.P. are not available to satisfyclaims that any creditor may have against the Trust, its other affiliates, orany other person or entity, other than claims of creditors of such BankruptcyRemote Entity.  Neither the Trust norany of its other affiliates have agreed to pay or make its assets available topay creditors of the Bankruptcy Remote Entity. No affiliate of BPP/Simi Valley, L.P. has agreed to pay or make itsassets available to pay creditors of the Bankruptcy Remote Entity.

 

The Trust is currently carrying the property at a net realizable valueequal to the mortgage amount.  Also, theongoing operations of the property have no economic impact on the Trust and thetransfer of the property to either a purchaser or the lender will have noeffect on current estimated net realizable value of the Trust.

 

**Gateway Center**

 

Gateway Center is located on land which is subject to a non-cancelableground lease with the Marin City Community Land Corporation (the “CLC”)expiring in 2089.  BPP/Marin, L.P. andthe CLC have entered into a purchase and sale agreement for the sale of theGateway Center project.  Pursuant to theterms of the purchase and sale agreement, the closing date is set for July 31,2003.  (See “Item 3 – Legal Proceedings– Gateway Center”).

 

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**Mortgage Debt**

 

At December 31, 2002, the Trust had approximately $31,249,000 offixed-rate mortgage debt secured by interests in the two remainingproperties.  The following table setsforth certain information regarding the Trust’s mortgage debt as of December31, 2002:

 
| **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(2)                          |   | 15,622,000                                    |           | June 2026          |         | 8.98%              |       | 1,579,000           |       |
| **Total**                                      |   | **$**                                         | **31,249,000** | ** **         |         | ** **         |       | ** **          | **$**      | **3,072,000** | ** ** |

 

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(1)                                  Balloonpayment at maturity.

(2)                                  Inreceivership, see “Item 2 – Retail Properties - Simi Valley Plaza.”

 

The Company entered into leases with third-party landlords for officespace that it occupied for its offices (see “Note 8 - Operating Leases in theConsolidated Financial Statements”). These leases contain commercially standard terms and do not involve anycommitments which the Trustees believe are material to the Trust’s operationsor financial condition.

 
| ITEM 3.  |   | LEGAL PROCEEDINGS. |
|---------------|--------|--------------------|

 

**LakeArrowhead Village**

 

In April 2001, a lawsuit was filed in the Superior Court for the Countyof Orange, California by approximately ten tenants at the Company’s former LakeArrowhead Village property (the “Arrowhead Property”).  The lawsuit was filed against the Company,the immediate former owner of the property who had contributed the property tothe Company, as well as against all of the individual and corporate managersand management companies of the property during the periods of the tenants’leases.  The complaint alleged, amongother things, breach of contract, fraud, intentional misrepresentation andunfair business practices, and it alleges that the Company overcharged thesetenants for common area maintenance (“CAM”). This lawsuit was resolved in June 2002 after the Company made astatutory offer to allow a compromise judgment to be entered against theCompany in the amount of $300,000.

 

On January 17, 2003, nine of the same tenants who filed theaforementioned lawsuit in Orange County Superior Court, together with six othertenants at the Company’s former Arrowhead Property, filed a lawsuit in theSuperior Court of the State of California, County of San Bernardino.  The lawsuit was filed against the Company,the Trust, the Trustees, Scott C. Verges individually, the current owner of theproperty ("LAV, LLC"), the former owner of the property who hadcontributed the property to the Company, and many of the individual andcorporate managers and management companies of the property during the periodsof the tenants’ leases.  LAV, LLC, is anentity in which Scott C. Verges, a co-trustee of the Trust, is a member.  (See “Item 13 - Certain Relationships andRelated Transactions”).  The complaintalleges, among

 

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other things, breach of contract, fraud, intentional misrepresentationand unfair business practices, and it alleges that the Company overchargedthese tenants for CAM.  The plaintiffsare seeking an undisclosed amount of monetary damages.  On March 10, 2003, the lawsuit was moved tothe United States District Court for the Central District of California,Eastern Division.  With respect to thenine tenants who previously sued the Company and accepted a compromise judgmentin June 2002, the Trustees believe the claims against the Company and the Trustare barred because they were previously adjudicated, and the Trustees plan toseek a ruling from the Court to that effect. With respect to the other six tenants, the Trustees believe that theclaims are without merit and intend to vigorously defend against them.

 

In addition, on April 25, 2002, a lawsuit was filed in Los AngelesSuperior Court against Burnham Pacific Operating Partnership, L.P., theCompany’s operating partnership (the “Operating Partnership”), and theCompany.  The lawsuit was filed by theindividuals and their investment companies that owned the Arrowhead Propertyimmediately before the Company acquired it. The plaintiffs originally contributed the Arrowhead Property in exchangefor Operating Partnership units.  Thecomplaint arose out of the sale of the Arrowhead Property to LAV, LLC.  The complaint alleged that the sale of theArrowhead Property to LAV, LLC constitutes a (i) breach of contract, (ii)breach of fiduciary duty, (iii) breach of the partnership agreement, and (iv)violation of California Business and Professions Code Section 17200.  The complaint sought monetary damages,attorneys fees and specific performance of the alleged obligation to sell theArrowhead Property to plaintiffs on the same terms as sold to LAV, LLC.  With respect to the breach of contractaction, the plaintiffs sought damages with respect to the alleged value oftheir Operating Partnership units.  Withrespect to the alleged breaches of fiduciary duty and of the partnershipagreement, the plaintiffs sought monetary damages of not less than $4.8 million.  This lawsuit was settled and dismissed inJune 2002 for a settlement value of approximately $850,000.

 

**Gateway Center**

 

In November 2001, the Operating Partnership filed a suit to establishthat the CLC, the landlord under the ground lease for the Company’s GatewayCenter, breached the lease by refusing to consent to a proposed assignment ofthe lease in connection with a proposed sale of the property.  The CLC filed a cross-complaint seeking toestablish breaches of the lease by the Operating Partnership.  In May 2002, BPP/Marin, L.P. (“BPP/Marin”)(an indirect subsidiary of the Company that is the owner of the asset) filed asecond legal proceeding seeking to preclude the CLC from declaring any defaultunder the parties’ lease.  The partiesthen stipulated to binding arbitration of all claims in both legalproceedings.  In August 2002, theparties entered into a settlement arrangement that purported to resolve allclaims between BPP/Marin and the CLC pertaining to the Gateway Center lease.  BPP/Marin paid the CLC $815,000 to coverpast and future rent obligations.  TheCLC agreed to certain accounting matters which make it unlikely that anyfurther rent will be owed under the lease for the next ten years or more.  BPP/Marin and the CLC agreed that options topurchase BPP/Marin’s interest in the property for $20.75 million would beprovided first to a specified assignee of the CLC, next to POB Apollo andfinally to the CLC itself.  The CLC’spurported exercise of its purchase right remains pending with the CLC having aright to close escrow not later than July 31, 2003.

 

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On December 10, 2002, BPP/Marin initiated anarbitration proceeding against the CLC relating to the Gateway Center.  BPP/Marin is seeking monetary damages forthe CLC’s interference with a prospective sale of BPP/Marin’s leaseholdinterest to POB Apollo.  In January2003, the CLC asserted by cross-claim that the CLC-BPP/Marin Land Leasepertaining to subordination of the CLC’s reversionary interest in the Lease isunenforceable.  On March 26, 2003, theTrust received a non-appealable judgment from the arbitrator that thesubordination clause is enforceable.

 

**DevelopersDiversified**

 

The Trust is currently involved in various legal proceedings withDevelopers Diversified Realty Corporation (“DDRC”) and DDR Real EstateServices, Inc. (“DDRRES”), an affiliate of DDRC which acted as the Company’sliquidator and property manager for the period from December 15, 2000 throughJune 27, 2002.

 

On January 9, 2003, DDRC filed a lawsuit in the Superior Court of theState of California, County of San Diego against the Company and Trust allegingbreach of contract and related claims arising from the sale of the HilltopPlaza shopping center in Richmond, California. DDRC is seeking damages of approximately $175,000, which consists mostlyof post-closing rent paid by tenants to the Company instead of DDRC.  The Trust has filed a cross-complaintseeking damages against DDRC in the approximate amount of $25,000 for variousaccounting errors.

 

On January 10, 2003, DDRRES filed a lawsuit against the Company andTrust in the Supreme Court of the State of New York, Monroe County.  DDRRES’ lawsuit alleges breach of contractand related claims arising from the liquidation and property managementservices that DDRRES was to perform. DDRRES’ lawsuit seeks monetary damages ofapproximately $98,000 and a judicial declaration that DDRRES is entitled toretain construction management fees obtained from the Company in the amount ofapproximately $530,000.  The Trustdenies DDRRES’ claims and intends to vigorously defend against the lawsuit.

 

The Trust, 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 regarding various accounting issues. The Trust’s lawsuit allegesbreach of contract, breach of fiduciary duty, negligence, unfair businesspractices and related claims against DDRRES, and the Trust is seeking more than$2.5 million in damages. It is not yet clear whether the competing claimsasserted by the Trust and DDRRES regarding DDRRES’ conduct as liquidator andproperty manager for the Company will proceed in New York or California. TheTrust anticipates that the Courts will designate a single forum for these disputesin the next few months.

 

**RVIP**

 

The Trust is currently involved in legal proceedings arising from salesby the Company of ten shopping centers to Prudential Insurance Company ofAmerica and its affiliates (collectively, “RVIP”) between December 2000 andApril 2001.

 

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On December 17, 2002, the Trust filed an action in the Superior Courtof the State of California, County of Contra Costa, against RVIP and thePleasant Hill Redevelopment Agency seeking the return of a deposit paid by theCompany in connection with the development of a shopping center in PleasantHill, California.  The deposit at issueamounts to approximately $72,000, including interest. RVIP is contesting thelawsuit and claims that it should receive the deposit monies.

 

On January 21, 2003, RVIP filed a lawsuit in the Superior Court of theState of California, County of San Francisco, against the Company and theco-trustees of the Trust alleging breach of contract and related claims in connectionwith RVIP’s purchase of several properties, including the Pleasant Hillshopping center and Plaza at Puente Hills in California. RVIP is seekingdamages of approximately $308,000.  TheTrust disputes RVIP’s claims and intends to assert cross-claims against RVIParising from these property sales.

 

**Departmentof Labor**

 

The Trust has been advised that the U.S. Department of Labor hascommenced an investigation regarding the Company’s decision to suspend tradingby employees of shares of Company common stock held by them in the Company’s401(k) Plan for certain periods of time following the receipt of an unsolicitedproposal from Shottenstein Stores Corporation and certain of its affiliates inJune 1999.  No formal claim has yet beenbrought by the Department of Labor.  Ifand when a formal claim is made, the Trustees will analyze the claim andrespond appropriately.

 

**General**

 

While the Trust has established reserves for anticipated costs relatingto the foregoing litigation matters (including attorneys fees and judgment andsettlement costs), there can be no assurance as to the outcome of any of theforegoing litigation or that the reserves established by the Trust will besufficient to offset such costs.  Ifcosts related to the foregoing litigation matters exceed the reservesestablished by the Trust, the estimated amount of future cash distributionscould be materially adversely affected.

 

The Company and the Trust are subject to other legal claims andproceedings that arise in the ordinary course of business.  The Trustees believe that the outcome ofthese other claims and proceedings will not have a material adverse effect onthe estimated amount of future cash distributions, however there can be noassurance in this regard.

 
| ITEM 4.  |   | SUBMISSION OF MATTERS TO A VOTE OF BENEFICIARIES. |
|---------------|--------|---------------------------------------------------|

 

No matters were submitted to a vote of the Beneficiaries during theperiod from June 28, 2002 through December 31, 2002.

 

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**PART II**

 
| ITEM 5. |   | MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED  BENEFICIARY MATTERS. |
|---------|--------|------------------------------------------------------------------------------|

 

**MarketInformation**

 

There is no public market for the Units of the Trust.  On June 27, 2002, the Company formallyclosed its stock transfer books and its common stock was delisted from the NewYork Stock Exchange.  On June 28, 2002,the Company filed a Form 15 with the SEC to terminate the registration of itscommon stock under the Exchange Act and its obligation to file periodic reportswith respect thereto.

 

**Holders**

 

The Units are not transferable except by will, intestate succession oroperation of law.  As of December 31,2002, the Trust had approximately 1,492 Beneficiaries of record and 32,928,220Units outstanding.

 

**Distributions**

 

During the period from June 28, 2002 through December 31, 2002, theTrust made a liquidating distribution to the Beneficiaries of $0.50 per Unit.

 

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| ITEM 6.  |   | SELECTED FINANCIAL DATA. |
|---------------|--------|--------------------------|

 

The following selected financial data of the Trust are qualified byreference to and should be read in conjunction with the financial statements,related notes thereto, other financial data included elsewhere herein andManagement’s Discussion and Analysis of Financial Condition and Results ofOperations, which is included elsewhere in this Annual Report on Form10-K.  The results for the period fromJune 28, 2002 through December 31, 2002 are not comparable to any prior periodbecause the Trust began operations as of June 28, 2002.

 

CHANGES IN NETASSET DATA (in thousands, except per Unit amounts)

 
|                         |   | **June 28,  2002  through  December 31, 2002** |   |
|------------------------------|--------|------------------------------------------------|--------|
|                         |   |                                           |   |
| Total Revenues               |   | $                                              | 2,176  |   |
| Loss From  Operations        |   | $                                              | (372   | ) |
| Loss Per Unit                |   | $                                              | (0.01  | ) |
|                         |   |                                           |   |
| Distributions  Paid          |   | $                                              | 16,466 |   |
| Distributions  Paid Per Unit |   | $                                              | 0.50   |   |

 

 

NET ASSET DATA (inthousands, except per Unit amounts)

 
|                       |   | **December  31, 2002** |   |
|----------------------------|--------|------------------------|--------|
|                       |   |                   |   |
| Total Assets               |   | $                      | 65,744 |   |
| Total  Liabilities         |   | $                      | 39,235 |   |
| Net Assets in  Liquidation |   | $                      | 26,509 |   |
|                       |   |                   |   |
| Net Asset Value  per Unit  |   | $                      | 0.81   |   |

 
| ITEM 7. |   | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS OF OPERATIONS. |
|---------|--------|----------------------------------------------------------------------------------------------|

 

**Forward-lookingStatements and Risk Factors**

 

Certain statements contained in this annual report that are nothistorical constitute “forward-looking statements.”  You can identify forward-looking statements by our use of thewords “anticipate,” “assume,” “believe,” “estimate,” “expect,” “plan,”“intend,” “project,” “may,” “will” and other similar expressions.  These statements are based upon our currentexpectations, estimates and projections, and they are not guarantees of futureresults.  The forward-looking statementsinvolve known and unknown risks, uncertainties and other factors which are, insome cases, beyond the control of the Trust and could materially affect theTrust’s actual results.  Factors thatcould cause actual results to differ materially from those expressed or impliedby forward-looking statements include, but are not limited to, the followingrisk factors.

 

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**Risk-Factors**

 

**Wecannot assure the amounts or timing of distributions.**

 

If the values of our assets decline, or if the costs and expensesrelated to selling our remaining assets exceed our current estimates, then theamounts of any future distributions to the Trust’s Beneficiaries may bematerially adversely affected.  Inaddition, the ability to sell or dispose real estate assets depends, in somecases, on the availability of financing to buyers on favorable terms.  If favorable financing is not available, itmay take longer than expected to sell our remaining assets at desirable prices,and this may delay our ability to make distributions.  There can be no assurance that we will be successful in disposingof our remaining assets for values approximating those currently estimated byus or as to the timing of any related distributions.

 

**Theamounts and timing of distributions may be adversely affected by liabilitiesand indemnification obligations following asset sales.**

 

In selling our assets, we may be unable to negotiate agreements thatprovide for the buyers to assume all of the known and unknown liabilitiesrelating to the assets, including, without limitation, environmental andstructural liabilities.  In addition, ifwe agree to indemnify the buyers for such liabilities, we may be unable tolimit the scope or duration of such indemnification obligations to desirablelevels or time periods.  As a result, wehave from time to time determined, and we may in the future determine, that itis necessary or appropriate to reserve cash amounts or obtain insurance inorder to attempt to cover the liabilities not assumed by the buyers and tocover potential indemnifiable losses. There can be no assurance that the reserves and insurance will besufficient to satisfy all liabilities and indemnification obligations arisingfrom assets previously sold by the Company or arising after the sale of ourremaining assets, and any insufficiencies may have a material adverse effect onthe amounts and timing of any distributions.

 

**We mayencounter increased difficulty in collecting the accounts receivable associatedwith the properties that the Company previously sold or that the Trust may sellin the future.**

 

When we sell our properties, we generally retain the associatedaccounts receivable because the purchasers of real estate are not willing toassume the risk of collection.  TheTrust is also actively attempting to collect the remaining accounts receivableassociated with properties sold by the Company prior to the formation of theTrust on June 28, 2002.  Our ability tocollect the accounts receivable depends significantly on our collection effortsand the debtor’s financial ability to pay. Because the Trust has no direct relationship or significant leveragewith the debtors after these sales, it is difficult to collect the amounts owed.  While we make every effort to collect all ofour receivables, it is necessary for us to establish reasonable reserves forportions of the accounts receivable that we believe may not be collected.  There can be no assurance, however, that theamount of uncollected accounts receivable will not exceed our reserves.

 

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**We could have financial problems as aresult of our tenants’ financial difficulties.**

 

At any time, any of our tenants may seek the protection of thebankruptcy laws.  Under the bankruptcylaws, that tenant’s lease could be rejected and terminated, which would causeus to lose rental income. In addition, a tenant from time to time mayexperience a downturn in its business which may weaken its financial conditionand result in its failure to make rental payments when due. A tenant’s failureto affirm its lease following bankruptcy or a weakening of its financialcondition could impair our results of operations, result in lower sales pricesfor our assets and reduce the amounts of distributions to the Trust’sBeneficiaries.

 

**We maybe unable to obtain all of the consents and approvals necessary to transfer ourremaining assets.**

 

In general, an agreement relating to the purchase and sale of real estateprovides that the completion of the sale is subject to the satisfaction ofconditions, including consents and approvals of specified third parties.  The failure of the Trust to obtain allconsents and approvals that are necessary to transfer its assets may have amaterial adverse effect on the amounts and timing of distributions to theTrust’s Beneficiaries.

 

**Theliquidation of our assets may result in the expedited filing of lawsuitsagainst the Trust.**

 

Because the Trust is continuing to liquidate the assets formally ownedby the Company, it may be more likely that third parties will decide to filelawsuits against the Trust and that they will expedite the filing of suchlawsuits.  Since the formation of theTrust on June 28, 2002, the Trust has been named as a defendant in severallawsuits.  (See Part I – Item 3.  – “Legal Proceedings”).  There can be no assurance that the costsrelated to the defense against and the outcome of any such lawsuits will nothave a material adverse effect on the amounts and timing of any distributionsmade to the Trust’s Beneficiaries.

 

**Terms ofsales of assets are not subject to approval by the Beneficiaries and may not besatisfactory to all Beneficiaries.**

 

The Trustees of the Trusthave the authority to sell any or all of the Trust’s assets on terms that theydetermine are appropriate.  The Trust’sBeneficiaries will have no opportunity to vote on these matters and will,therefore, have no right to approve or disapprove the terms of the sales.  As a result, the terms of sales of assetsmay not be satisfactory to all Beneficiaries.

 

**We couldincur costs from environmental problems even though we did not cause,contribute to or know about them.**

 

Because we own, operate and supervise the management of the Trust’sreal estate, and because we assumed all of the liabilities of the Company, forliability purposes we may be considered under the law to be an owner oroperator of those properties or as having arranged for the disposal ortreatment of hazardous or toxic substances. As a result, we could have to payremoval or remediation costs.  Federal,state and local laws often impose liability regardless of whether the owner oroperator knew of, or was responsible for, the presence of the hazardous ortoxic

 

12

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substances.  The presence ofthose substances, or the failure to properly remediate them, may impair theowner’s or operator’s ability to sell or rent the property.  A person who arranges for the disposal ortreatment of hazardous or toxic substances may also be liable for the costs ofremoving or remediating the substances at a disposal or treatment facility,whether or not that person owns or operates the facility.  Thus, we might have to pay other costs,including governmental fines and costs related to personal injuries andproperty damage, resulting from the environmental condition of our properties,regardless of whether we actually had knowledge of or contributed to thoseconditions.  Furthermore, environmentallaws impose liability for the release of asbestos-containing materials into theair.  If we were ever held responsiblefor releasing asbestos-containing materials, third parties could seek recoveryfrom us for personal injuries.

 

**Ourinsurance coverage is limited and may not cover losses that we suffer.**

 

We have comprehensive general liability coverage and umbrella liabilitycoverage on all of our properties. We believe that our properties areadequately insured against liability claims and the cost of defending thoseclaims. Our coverage is subject to deductibles and to the limitations describedbelow regarding insurance for losses caused by earthquakes or floods.Similarly, we believe that our properties are adequately insured on areplacement cost basis, subject to deductibles, against direct physical damagefor costs incurred to repair or rebuild each property, including loss of rentalincome during the reconstruction period. Some types of extraordinary losses, however, either are not insurable orare not economically insurable.  If anyuninsured loss occurs, we could lose our investment in, and anticipatedrevenues from, a property.  An uninsuredloss could adversely affect our ability to sell our properties or makedistributions to the Trust’s Beneficiaries.

 

**Overview**

 

The following discussion should be read in conjunction with theconsolidated financial statements and notes thereto appearing elsewhere in thisAnnual Report on Form 10-K.

 

As a result of the adoption of the Plan of Liquidation and its approvalby the Company’s stockholders, the Company adopted the liquidation basis ofaccounting for all periods subsequent to December 15, 2000.  In accordance with the liquidation basis ofaccounting, assets are stated at their estimated net realizable value and liabilitiesare stated at their estimated settlement amounts, including estimated costsassociated with carrying out the liquidation. Actual values realized for assets and settlement of liabilities maydiffer materially from the amounts estimated. Factors that may cause such variations include, among other factors, thepossibility that assets may not be sold on the terms currently provided, andthe other risk factors discussed in this Annual Report on Form 10-K.

 

13

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Pursuant to the Plan of Liquidation, on June 28, 2002, the Companytransferred the following remaining assets and liabilities to the Trust:

 
| 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 of Operations**

 

The following describes the results of operations for the period fromJune 28, 2002 through December 31, 2002 (the “Trust Period”).  The Trust recorded a net loss of $372,000($0.01 per Unit) for the Trust Period. The Net Loss primarily resulted from general and administrative expensesexceeding the property operating income. General and administrative expenses include consultants, receivablecollections, tax return reviews, Beneficiary communication and other generaloffice expenses.  The results for theTrust Period are not comparable to any prior period as the Trust beganoperations June 28, 2002.

 

**Reserve for Estimated Costs Duringthe Period of Liquidation (the “Reserve”)**

 

Under the liquidation basis of accounting, costs associated withliquidating the Trust’s assets must be estimated and accrued.  These amounts can vary significantly due to,among other things, the timing and realized proceeds from property sales, thecosts of retaining personnel and one or more trustees to oversee theliquidation, the costs of insurance, the timing and amounts associated withdischarging known and contingent liabilities and the costs associated withcessation of the Trust’s operations. These costs are estimates and are expected to be incurred over theremaining Trust period.

 

On June 28, 2002, the Reserve balance transferred by the Company to theTrust was $9,187,000.  During the periodfrom June 28, 2002 through December 31, 2002, the Trust made payments in theamount of $3,041,000 resulting in a December 31, 2002 Reserve balance of$6,146,000.

 

**Net Assets in Liquidation**

 

Net Assets in Liquidation at December 31, 2002 were $26,509,000 or$0.81 per unit. The valuation of Net Assets in Liquidation is based onestimates as of December 31, 2002, and the actual values realized for assetsand settlement of liabilities may differ materially from the amounts estimated.

 

14

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**Distributions**

 

During the period from June 28, 2002 through December 31, 2002, theTrust made a liquidating distribution to the Beneficiaries of $0.50 perUnit.  The Trustees estimate that theTrust will make future aggregate cash distributions of approximately $0.75 perUnit based upon estimated net proceeds from the sale of remaining real estate,the estimated timing of such sale, amounts required to settle liabilities, thelevels of reserves deemed necessary or appropriate for known and unknownliabilities, and other considerations. Because the estimate of additional cash distributions is based onvarious assumptions and projections, there can be no assurance that the actualamount of distributions will not differ materially from the Trustees’ estimate.

 

**Dispositions**

 

During the period from June 28, 2002 through December 31, 2002, theTrust sold Central and Palms to Pines shopping centers for aggregate proceedsof approximately $6.2 million in cash. As a result, the Trust recognized the remaining Deferred Gain on RealEstate Assets of $66,000.

 

**Liquidity and Capital Resources**

 

The Trustees anticipate that the combination of cash from asset sales,cash flows from operating activities and current cash reserves will provideadequate capital for all operating expenses including all required payments onthe Trust’s notes payable, binding capital expenditure obligations, tenantimprovements and litigation expenses.

 

**Effects of Inflation**

 

Substantially all of the Trust’s leases contain provisions designed tomitigate the adverse impact of inflation. These provisions include clauses enabling the Trust to receivepercentage rentals based on tenants’ gross sales, which generally increase asprices rise, and/or escalation clauses, which generally increase rental ratesduring the terms of the leases.  Theseescalation clauses are often related to increases in the consumer price indexor similar inflation indices.  Most ofthe Trust’s leases require the tenant to pay its share of operating expenses,including common area maintenance, real estate taxes, and insurance, therebyreducing the Trust’s exposure to increases in these operating expensesresulting from inflation to the extent that its properties are occupied.

 

15

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| ITEM 7A. |   | QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET  RISK. |
|----------|--------|-----------------------------------------------------------|

 

At December 31, 2002, the Trust’s long-term debt consisted entirely offixed-rate, secured mortgage debt.  Theweighted-average interest rate on the $31,249,000 of secured mortgage debtoutstanding at December 31, 2002 was approximately 8.18% with maturities at2008 and 2026.

 

The table below presents principal amounts, interest rates and year ofmaturity for the Trust’s debt at December 31, 2002 (dollars in thousands):

 
| **Property**          |   | **Principal  Amount** |   | **Interest  Rate** |   | **Year of  Maturity** |   |
|-----------------------|--------|-----------------------|--------|--------------------|--------|-----------------------|--------|
|                  |   |                  |   |               |   |                  |   |
| Gateway Center        |   | $                     | 15,627 |               | 7.39%  |                  | 2008   |   |
| Simi Valley  Plaza(1) |   | 15,622                |   | 8.98%              |   | 2026                  |   |
|                       |        |                       |        |                    |        |                       |        |  |

 

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(1)          In receivership, see“Item 2 – Retail Properties - Simi Valley Plaza.”

 

Because the table incorporates only those exposures that exist at December31, 2002, it does not consider those exposures or positions that could ariseafter that date.  The Trust is in theprocess of liquidating, and does not expect to incur any additionalindebtedness.  Moreover, all of itsexisting mortgage debt is fixed-rate. Therefore, the Trust does not believe that future interest ratefluctuations will have a material effect on the Trust.  The Trust does not utilize financialinstruments for trading or other speculative purposes.

 

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| ITEM 8.  |   | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
|---------------|--------|----------------------------------------------|

 

BPP LIQUIDATINGTRUST

CONSOLIDATEDSTATEMENT OF NET ASSETS (LIQUIDATION BASIS)

DECEMBER 31, 2002

(unaudited)

(in thousands)

 
| ASSETS                                                        |   |   |   |
|---------------------------------------------------------------|--------|--------|--------|
| Real Estate Held  for Sale                                    |   | $      | 35,772 |   |
| Cash and Cash  Equivalents                                    |   | 26,811 |   |
| Restricted Cash                                               |   | 413    |   |
| Receivables-Net                                               |   | 2,607  |   |
| Other Assets                                                  |   | 141    |   |
| Total Assets                                                  |   | 65,744 |   |
|                                                          |   |   |   |
| LIABILITIES                                                   |   |   |   |
| Accounts Payable  and Other Liabilities                       |   | 1,783  |   |
| Tenant Security  Deposits                                     |   | 57     |   |
| Notes Payable                                                 |   | 31,249 |   |
| Reserve for  Estimated Costs During the Period of Liquidation |   | 6,146  |   |
| Total  Liabilities                                            |   | 39,235 |   |
|                                                          |   |   |   |
| NET ASSETS IN  LIQUIDATION                                    |   | $      | 26,509 |   |

 

See the Accompanying Notes

 

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BPP LIQUIDATING TRUST

CONSOLIDATEDSTATEMENT OF CHANGES IN NET ASSETS (LIQUIDATION BASIS)

FOR THE PERIODFROM JUNE 28, 2002 THROUGH DECEMBER 31, 2002

(unaudited)

(in thousands,except per Unit amounts)

 
| REVENUES                                              |   |    |   |
|-------------------------------------------------------|--------|---------|--------|
|                                                  |   |    |   |
| Rents                                                 |   | $       | 1,793  |   |
| Interest and  Other Income                            |   | 383     |   |
|                                                  |   |    |   |
| Total Revenues                                        |   | 2,176   |   |
|                                                  |   |    |   |
| COSTS AND  EXPENSES                                   |   |    |   |
|                                                  |   |    |   |
| Interest                                              |   | 591     |   |
| Rental Operating                                      |   | 584     |   |
| Provision for  Bad Debt                               |   | 35      |   |
| General and  Administrative                           |   | 1,180   |   |
| Litigation and  Legal                                 |   | 158     |   |
|                                                  |   |    |   |
| Total Costs and  Expenses                             |   | 2,548   |   |
|                                                  |   |    |   |
| Net Loss                                              |   | (372    | )      |
|                                                  |   |    |   |
| Net Assets  Contributed to the Trust on June 28, 2002 |   | 43,344  |   |
| Adjustments to  Net Assets in Liquidation             |   | 3       |   |
| Liquidating  Distributions                            |   | (16,466 | )      |
|                                                  |   |    |   |
| Net Assets in  Liquidation at December 31, 2002       |   | $       | 26,509 |   |
|                                                  |   |    |   |
| Loss Per Unit                                         |   | $       | (0.01  | ) |

 

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BPP LIQUIDATING TRUST

CONSOLIDATEDSTATEMENTS OF CASH FLOWS (LIQUIDATION BASIS)

FOR THE PERIODFROM JUNE 28, 2002 THROUGH DECEMBER 31, 2002

(unaudited)

(in thousands)

 
| CASH FLOWS FROM  OPERATING ACTIVITIES:                                                 |   |    |   |
|----------------------------------------------------------------------------------------|--------|---------|--------|
| Net Loss                                                                               |   | $       | (372   | ) |
| Adjustments to  Reconcile Net Loss to Net Cash used for Operating Activities:          |   |    |   |
| Provision for  Bad Debt                                                                |   | 35      |   |
| Changes in Other  Assets and Liabilities:                                              |   |    |   |
| Receivables and  Other Assets                                                          |   | 1,397   |   |
| Accounts Payable  and Other Liabilities                                                |   | (1,002  | )      |
| Tenant Security  Deposits                                                              |   | (69     | )      |
| Reserve for  Estimated Costs During the Period of Liquidation                          |   | (3,041  | )      |
| Recognition of  Deferred Gain                                                          |   | (66     | )      |
| Net Cash Used  for Operating Activities                                                |   | (3,118  | )      |
|                                                                                   |   |    |   |
| CASH FLOWS FROM  INVESTING ACTIVITIES:                                                 |   |    |   |
| Proceeds from  Sales of Real Estate                                                    |   | 6,200   |   |
| Post Closing  Costs from Sales of Real Estate                                          |   | (133    | )      |
| Net Cash  Provided by Investing Activities                                             |   | 6,067   |   |
|                                                                                   |   |    |   |
| CASH FLOWS FROM  FINANCING ACTIVITIES:                                                 |   |    |   |
| Principal  Payments of Notes Payable                                                   |   | (153    | )      |
| Restricted Cash                                                                        |   | 321     |   |
| Liquidating  Distribution Paid                                                         |   | (16,466 | )      |
| Net Cash Used  for Financing Activities                                                |   | (16,298 | )      |
|                                                                                   |   |    |   |
| Net Decrease in  Cash and Cash Equivalents                                             |   | (13,349 | )      |
| Cash and Cash  Equivalents at Beginning of Period                                      |   | 40,160  |   |
|                                                                                   |   |    |   |
| Cash and Cash Equivalents  at End of Period                                            |   | $       | 26,811 |   |
|                                                                                   |   |    |   |
| SUPPLEMENTAL  DISCLOSURES OF CASH FLOW INFORMATION:                                    |   |    |   |
| Cash Paid for  Interest During the Period from June 28, 2002 through December 31, 2002 |   | $       | 591    |   |

 

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**BPP LIQUIDATING TRUST**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**December 31, 2002**

 

**1.****              PURPOSEOF THE BPP LIQUIDATING TRUST**

 

On August 31, 2000, the Board of Directors of Burnham PacificProperties, Inc. (the “Company”) adopted a Plan of Complete Liquidation andDissolution (the “Plan of Liquidation”) and directed that the Plan ofLiquidation be submitted to the Company’s stockholders for approval.  Thestockholders of the Company subsequently approved the Plan of Liquidation atthe 2000 Annual Meeting of Stockholders held on December 15, 2000.

 

The Plan of Liquidation contemplated the orderly sale of all of theCompany’s assets for cash or such other form of consideration as may beconveniently distributed to the Company’s stockholders and the payment of (or provisionfor) the Company’s liabilities and expenses, as well as the establishment ofreserves to fund the Company’s contingent liabilities.  The Plan of Liquidation gave the Company’sBoard of Directors the power to sell any or all of the assets of the Companywithout further approval by the stockholders and required that the finalliquidating distribution, either directly to stockholders or to a liquidatingtrust, be made no later than December 15, 2002.

 

On June 28, 2002, the Company transferred its remaining assets to (andits remaining liabilities were assumed by) the co-trustees of the BPPLiquidating Trust (the “Trust”), Scott C. Verges and Douglas P. Wilson (the“Trustees”), in accordance with the Company’s Plan of Liquidation, and theCompany was dissolved.  The last day oftrading of the Company’s common stock on the New York Stock Exchange was June27, 2002 (the “Record Date”), and the Company’s stock transfer books wereclosed as of the close of business on that date.  In addition, on June 28, 2002 the Company filed a Form 15 withthe Securities and Exchange Commission (the “SEC”) to terminate theregistration of the Company’s common stock under Section 12(b) of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”), and itsobligation to file periodic reports. The Company had previously received a “No-Action” letter from the SECregarding the Exchange Act reporting obligations of the Trust.

 

During the period of liquidation from December 16, 2000 through June27, 2002, the Company assigned, sold or otherwise disposed of all of its realestate assets except its interests in four properties:  Palms to Pines Shopping Center, CentralShopping Center, Simi Valley Plaza and Gateway Center (formerly known as MarinCity).

 

Under the terms of the Liquidating Trust Agreement executed by theCompany and the Trustees on June 28, 2002, each stockholder of the Company onthe Record Date (each, a “Beneficiary”) automatically became the holder of oneunit of beneficial interest (a “Unit”) in the Trust for each share of Companycommon stock then held of record by such stockholder, and all outstandingshares of Company common stock were automatically deemed cancelled.  Stockholders of the Company on the RecordDate were not required to take any action to receive their Units.  The rights of Beneficiaries in their Unitsare not represented by any form of certificate or other instrument. The Trust’sagent maintains a record of the name and address of each Beneficiary

 

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and such Beneficiary’s aggregate Units in the Trust.  Subject to limited exceptions related totransfer by 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.

 

The Trust was established for the sole purpose of winding up theCompany’s affairs and the liquidation of its assets with no objective tocontinue or engage in the conduct of a trade or business or cause any subsidiaryto continue or engage in the conduct of a trade or business, except asnecessary for the orderly liquidation of the Trust’s assets.

 

The Trust will terminate upon the earliest of (1) such time astermination is required by the applicable laws of the State of Maryland, (2)the distribution of all the Trust’s assets in accordance with the terms of theLiquidating Trust Agreement, or (3) the expiration of a period of three yearsfrom the date assets were first transferred to the Trust.  The existence of the Trust may, however, beextended to such later date as the Trustees may designate if they determinethat an extension is reasonably necessary to fulfill the purpose of the Trustand, prior to such extension, the Trustees shall have requested and receivedadditional No-Action assurances from the SEC.

 

**2.****              SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES**

 

**Basis of Presentation**

 

The Trust has adopted the liquidation basis of accounting.  Under the liquidation basis of accounting,assets are stated at their estimated net realizable values and liabilities,including the reserve for estimated costs during the period of liquidation, arestated at their anticipated settlement amounts.  The valuation of real estate held for sale as of December 31,2002 is based on current contracts, estimates as determined by independentappraisals and other indications of sales value, net of estimated selling costsof approximately $600,000.  Thevaluations of other assets and liabilities under the liquidation basis ofaccounting are based on the Trustees’ estimates as of December 31, 2002.  The actual values realized for assets andsettlement of liabilities may differ materially from the amounts estimated.

 

**Use of Estimates**

 

The preparation of financial statements in conformity with accountingprinciples generally accepted in the United States of America requires theTrustees to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities atthe date of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Actual results could differ materially from those estimates.

 

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**Assets and Liabilities Transferred tothe Trust**

 

The Company transferred the following assets and liabilities to theTrust on June 28, 2002:

 
| 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 |   |

 

**Income Taxes**

 

The Trust will be treated as a grantor trust and accordingly, will notbe subject to federal or state income tax on any income earned or gainrecognized by the Trust. The Trust will recognize taxable gain or loss when anasset is disposed of for an amount greater or less than the fair market valueof such asset at the time it was transferred from the Company to theTrust.  Each Beneficiary of the Trustwill be treated as the owner of a pro rata portion of each asset, includingcash, received by and held by the Trust and will be required to report on hisor her federal and state income tax return his or her pro rata share of taxableincome, including gains and losses recognized by the Trust. Accordingly, thereis no provision for federal or state income taxes in the accompanyingconsolidated financial statements.

 

**RealEstate and Real Estate Held for Sale**

 

Because the Trust has adopted the liquidation basis of accounting, realestate assets are reflected at their estimated net realizable values andclassified as real estate held for sale. Accordingly, the Trust has not recorded depreciation or amortizationexpense.  The valuation of real estateheld for sale as of December 31, 2002 was based on current contracts net ofestimated selling costs of approximately $600,000.

 

**Cash and Cash Equivalents**

 

For purposes of reporting cash flows, cash and cash equivalents includecash and certificates of deposit with original maturities of three months orless.

 

**RestrictedCash**

 

As of December 31, 2002, Restricted Cash was $413,000.  This amount is held in an escrow account asrequired by the note payable relating to the Gateway Center property and is tobe used to pay for insurance, real estate taxes, and capital expenditurespertaining to the real estate that collateralizes the note payable.

 

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**Receivables -Net**

 

Receivables are net of an allowance for doubtful accounts ofapproximately $5,872,000.

 

**Financial Instruments**

 

The carrying values reflected in the consolidated statement of netassets at December 31, 2002 reasonably approximate the fair values for cash andcash equivalents, receivables, accounts payable and notes payable.

 

**Adjustment to Deferred Gain on RealEstate Assets**

 

Adjusting assets to estimated net realizable value resulted in thewrite-up of certain real estate properties. The anticipated gains associated with the write-up of these real estateproperties were deferred until their sales. The amount of deferred gain on real estate assets transferred to theTrust on June 28, 2002 was $66,000. Upon the sale of Palms to Pines shopping center in August 2002, theentire remaining amount of deferred gain on real estate assets was recognized.

 

**Reserve for Estimated Costs Duringthe Period of Liquidation (the “Reserve”)**

 

Under the liquidation basis of accounting, costs associated withliquidating the Trust’s assets must be estimated and accrued.  These amounts can vary significantly due to,among other things, the timing and realized proceeds from property sales, thecosts of retaining personnel and one or more trustees to oversee theliquidation, the costs of insurance, the timing and amounts associated withdischarging known and contingent liabilities and the costs associated withcessation of the Trust’s operations. These costs are estimates and are expected to be incurred over theremaining Trust period.

 

On June 28, 2002, the Reserve balance transferred by the Company to theTrust was $9,187,000.  During the periodfrom June 28, 2002 through December 31, 2002, the Trust made payments in theamount of $3,041,000, resulting in a December 31, 2002 Reserve balance of$6,146,000.

 

**Recent Accounting Pronouncements**

 

In November 2002, the Financial Accounting Standards Board (“FASB”)issued FASB Interpretation (“FIN”) No. 45, Guarantor’s Accounting andDisclosure Requirements for Guarantees, Including Indirect Guarantees ofIndebtedness of Others.  FIN No. 45interprets FASB Statements No. 5, 57, and 107 and rescinds FIN No. 34.  The Trustees do not believe that theadoption of FIN No. 45 will have a significant impact on its financialstatements.

 

**Revenue Recognition**

 

Since the Trust has adopted the liquidation basis of accounting, themethod of straight lining of rental revenues over the life of the lease has notbeen utilized.  Revenues based on apercentage of tenants’ sales are recognized when tenants’ sales exceed theirsales breakpoint.

 

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**Net Loss Per Unit**

 

Net loss per Unit is calculated using the weighted-average number ofUnits outstanding at December 31, 2002. The following table shows the net loss per Unit computation for theperiod from June 28, 2002 through December 31, 2002 (in thousands except perUnit amount).

 
|                                    |   | **June 28,  2002  through  December 31, 2002** |   |
|-----------------------------------------|--------|------------------------------------------------|--------|
|                                    |   |                                           |   |
| Net Loss                                |   | $                                              | (372   | ) |
| Units  Outstanding at December 31, 2002 |   | 32,928                                         |   |
| Net Loss Per  Unit                      |   | $                                              | (.01   | ) |

 

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

 

Real estate held for sale at December 31, 2002, iscomprised entirely of interests in two retail shopping centers, Simi ValleyPlaza and Gateway Center.  At December31, 2002, both of the properties were pledged as collateral for notespayable.  In addition, the notes payableare secured by assignments of rents on such real estate.

 

**Simi Valley Plaza**

 

In late January 2002, House2Home, which occupied 113,932 square feetand operated under bankruptcy protection, ceased paying rent at the Company’sSimi Valley Plaza shopping center.  As aresult, the property no longer produced enough cash income to make the requireddebt service payments to the lender and control of the property was transferredto a Receiver pursuant to the certain Stipulation for Order re: Appointment ofReceiver and Issuance of Preliminary Injunction; Order Thereon, dated June 25,2002, BPP/Simi Valley, L.P. entered in the action captioned LaSalle Bank, N.A.v. BPP/Simi Valley, L.P., et al., Case No. SC033169 pending in the SuperiorCourt of the State of California for the County of Ventura.

 

Although control of the shopping center has been undertaken by aReceiver, BPP/Simi Valley, L.P. continues to hold fee title to Simi ValleyPlaza.  Simi Valley Plaza shoppingcenter is owned by BPP/Simi Valley, L.P., a “Bankruptcy Remote Entity,” whichis an indirect subsidiary of the Trust. The assets owned by BPP/Simi Valley, L.P. are not available to satisfyclaims that any creditor may have against the Trust, its other affiliates, orany other person or entity, other than claims of creditors of such BankruptcyRemote Entity.  Neither the Trust norany of its other affiliates have agreed to pay or make its assets available topay creditors of the Bankruptcy Remote Entity. No affiliate of BPP/Simi Valley, L.P. has agreed to pay or make its assetsavailable to pay creditors of the Bankruptcy Remote Entity.

 

The Trust is currently carrying the property at a net realizable valueequal to the mortgage amount.  Also, theongoing operations of the property have no economic impact on the

 

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Trust and the transfer of the property to either a purchaser or thelender will have no effect on current estimated net realizable value of theTrust.

 

**Gateway Center**

 

Gateway Center is leased to tenants under leasesexpiring at various dates through 2022. Certain of these leases contain provisions for rent increases based onconsumer price indices and certain leases contain renewal options of up to fiveyears.  Future minimum rental income tobe received by the Trust under the terms of these operating leases at December31, 2002 is as follows (in thousands):

 
| **Year Ending December 31,** |   | **Minimum  Rental Income** |       |
|------------------------------|--------|----------------------------|------------|
| 2003                         |   | $                          | 2,097      |   |
| 2004                         |   | 2,077                      |       |
| 2005                         |   | 1,882                      |       |
| 2006                         |   | 1,817                      |       |
| 2007                         |   | 1,184                      |       |
| Later Years                  |   | 13,085                     |       |
| **Total**                    |   | **$**                      | **22,142** | ** ** |

 

At December 31, 2002, three tenants, Best Buy, Ross Dress for Less andLinens N Things, each accounted for 10% or more of total revenues of the Trust.

 

Gateway Center is located on land which is subject to a non-cancelableground lease with the Marin City Community Land Corporation (the “CLC”)expiring in 2089.  BPP/Marin, L.P. andthe CLC have entered into a purchase and sale agreement for the sale of theGateway Center project.  Pursuant to theterms of the purchase and sale agreement, the closing date is set for July 31,2003.  (See "Note 9 –Contingencies").

 

**4.****              NOTESPAYABLE**

 

Notes payable as of December 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(2)                          |   | 15,622,000                                    |           | June 2026          |         | 8.98%              |       | 1,579,000           |       |
| **Total**                                      |   | **$**                                         | **31,249,000** | ** **         |         | ** **         |       | ** **          | **$**      | **3,072,000** | ** ** |

 

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(1)                                  Balloonpayment at maturity.

(2)                                  Inreceivership, see “Note 3 - Real Estate and Real Estate Held for Sale - SimiValley Plaza.”

 

25

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**5.****              SALESOF REAL ESTATE**

 

During the period from June 28, 2002 through December 31, 2002, theTrust sold Central and Palms to Pines shopping centers for aggregate proceedsof approximately $6.2 million in cash. As a result, the Trust recognized the remaining deferred gain on realestate assets of $66,000.

 

**6.****              LIQUIDATINGDISTRIBUTIONS**

 

In October 2002, the Trust made a liquidatingdistribution to the Trust’s Beneficiaries in the aggregate amount of$16,466,000 ($.50 per Unit).

 

**7.****              TRANSACTIONSWITH RELATED PARTIES**

 

In February 2002, the Company sold its interest in the Lake ArrowheadVillage shopping center to LAV, LLC, an entity in which Scott C. Verges, aco-trustee of the Trust, is a member. Under the Purchase and Sale Agreement, Scott C. Verges agreed to repaythe Company $877,000 for construction and other credits in 30 equalnon-interest bearing monthly installments. As of December 31, 2002, the unpaid remaining balance was approximately$614,000.

 

The Trust has engaged MBV Law, 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 paid to MBV Law for theperiod from June 28, 2002 through December 31, 2002, were approximately$141,000.

 

Douglas P. Wilson, either directly or indirectly through the DouglasWilson Companies, receives applicable fees specified in the Liquidating TrustAgreement.  The Douglas Wilson Companieswas paid approximately $242,000 for services rendered for the period from June28, 2002 through December 31, 2002.

 

**8.****              OPERATINGLEASES**

 

The Trust leases office space under various operating leases thatexpire in 2003.  Rental expense, underthese operating leases net of related sub-lease income for the period from June28, 2002 through December 31, 2002 was approximately $3,150.

 

Approximate minimum future lease payments, net of the related sub-leasepayments, under the remaining operating leases at December 31, 2002, are asfollows (in thousands):

 
| **For Year  Ending  December 31,** |   | **Lease  Payments** |   | **Sub-lease  Receipts** |   | **Net Lease  Payments** |   |
|------------------------------------|--------|---------------------|--------|-------------------------|--------|-------------------------|--------|
| 2003                               |   | $                   | 65     |                    | $      | (39)                    |   | $ | 26 |   |
|                                    |        |                     |        |                         |        |                         |        |  |  |  |

 

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**9.  CONTINGENCIES**

 

**LakeArrowhead Village**

 

In April 2001, a lawsuit was filed in the Superior Court for the Countyof Orange, California by approximately ten tenants at the Company’s former LakeArrowhead Village property (the “Arrowhead Property”).  The lawsuit was filed against the Company,the immediate former owner of the property who had contributed the property tothe Company, as well as against all of the individual and corporate managersand management companies of the property during the periods of the tenants’ leases.  The complaint alleged, among other things,breach of contract, fraud, intentional misrepresentation and unfair businesspractices, and it alleges that the Company overcharged these tenants for commonarea maintenance (“CAM”).  This lawsuitwas resolved in June 2002 after the Company made a statutory offer to allow acompromise judgment to be entered against the Company in the amount of$300,000.

 

On January 17, 2003, nine of the same tenants who filed theaforementioned lawsuit in Orange County Superior Court, together with six othertenants at the Company’s former Arrowhead Property, filed a lawsuit in theSuperior Court of the State of California, County of San Bernardino.  The lawsuit was filed against the Company,the Trust, the Trustees, Scott C. Verges individually, the current owner of theproperty (LAV, LLC), the former owner of the property who had contributed theproperty to the Company, and many of the individual and corporate managers andmanagement companies of the property during the periods of the tenants’leases.  LAV, LLC, is an entity in whichScott C. Verges, a co-trustee of the Trust, is a member.  (See “Note 7 - Transactions with RelatedParties”).  The complaint alleges, amongother things, breach of contract, fraud, intentional misrepresentation andunfair business practices, and it alleges that the Company overcharged thesetenants for CAM.  The plaintiffs areseeking an undisclosed amount of monetary damages.  On March 10, 2003, the lawsuit was moved to the United StatesDistrict Court for the Central District of California, Eastern Division.  With respect to the nine tenants whopreviously sued the Company and accepted a compromise judgment in June 2002,the Trustees believe the claims against the Company and the Trust are barred becausethey were previously adjudicated, and the Trustees plan to seek a ruling fromthe Court to that effect.  With respectto the other six tenants, the Trustees believe that the claims are withoutmerit and intend to vigorously defend against them.

 

In addition, on April 25, 2002, a lawsuit was filed in Los AngelesSuperior Court against Burnham Pacific Operating Partnership, L.P., theCompany’s operating partnership (the “Operating Partnership”), and theCompany.  The lawsuit was filed by theindividuals and their investment companies that owned the Arrowhead Propertyimmediately before the Company acquired it. The plaintiffs originally contributed the Arrowhead Property in exchangefor Operating Partnership units.  Thecomplaint arose out of the sale of the Arrowhead Property to LAV, LLC.  The complaint alleged that the sale of theArrowhead Property to LAV, LLC constitutes a (i) breach of contract, (ii)breach of fiduciary duty, (iii) breach of the partnership agreement, and (iv)violation of California Business and Professions Code Section 17200.  The complaint sought monetary damages,attorneys fees and specific performance of the alleged obligation to sell theArrowhead Property to plaintiffs on the same terms as sold to LAV, LLC.  With respect to the breach of contractaction, the plaintiffs sought damages with respect to the

 

27

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alleged value of their Operating Partnership units.  With respect to the alleged breaches offiduciary duty and of the partnership agreement, the plaintiffs sought monetarydamages of not less than $4.8 million. This lawsuit was settled and dismissed in June 2002 for a settlementvalue of approximately $850,000.

 

**Gateway Center**

 

In November 2001, the Operating Partnership filed a suit to establishthat the CLC, the landlord under the ground lease for the Company’s GatewayCenter, breached the lease by refusing to consent to a proposed assignment ofthe lease in connection with a proposed sale of the property.  The CLC filed a cross-complaint seeking toestablish breaches of the lease by the Operating Partnership.  In May 2002, BPP/Marin, L.P. (“BPP/Marin”)(an indirect subsidiary of the Company that is the owner of the asset) filed asecond legal proceeding seeking to preclude the CLC from declaring any defaultunder the parties’ lease.  The partiesthen stipulated to binding arbitration of all claims in both legalproceedings.  In August 2002, the partiesentered into a settlement arrangement that purported to resolve all claimsbetween BPP/Marin and the CLC pertaining to the Gateway Center lease.  BPP/Marin paid the CLC $815,000 to coverpast and future rent obligations.  TheCLC agreed to certain accounting matters which make it unlikely that anyfurther rent will be owed under the lease for the next ten years or more.  BPP/Marin and the CLC agreed that options topurchase BPP/Marin’s interest in the property for $20.75 million would beprovided first to a specified assignee of the CLC, next to POB Apollo andfinally to the CLC itself.  The CLC’spurported exercise of its purchase right remains pending with the CLC having aright to close escrow not later than July 31, 2003.

 

On December 10, 2002, BPP/Marin initiated anarbitration proceeding against the CLC relating to the Gateway Center.  BPP/Marin is seeking monetary damages forthe CLC’s interference with a prospective sale of BPP/Marin’s leaseholdinterest to POB Apollo.  In January2003, the CLC asserted by cross-claim that the CLC-BPP/Marin Land Leasepertaining to subordination of the CLC’s reversionary interest in the Lease isunenforceable.  On March 26, 2003, theTrust received a non-appealable judgment from the arbitrator that thesubordination clause is enforceable.

 

**DevelopersDiversified**

 

The Trust is currently involved in various legal proceedings withDevelopers Diversified Realty Corporation (“DDRC”) and DDR Real EstateServices, Inc. (“DDRRES”), an affiliate of DDRC which acted as the Company’sliquidator and property manager for the period from December 15, 2000 throughJune 27, 2002.

 

On January 9, 2003, DDRC filed a lawsuit in the Superior Court of theState of California, County of San Diego against the Company and Trust allegingbreach of contract and related claims arising from the sale of the HilltopPlaza shopping center in Richmond, California. DDRC is seeking damages of approximately $175,000, which consists mostlyof post-closing rent paid by tenants to the Company instead of DDRC.  The Trust has filed a cross-complaint

 

28

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seeking damages against DDRC in the approximate amount of $25,000 forvarious accounting errors.

 

On January 10, 2003, DDRRES filed a lawsuit against the Company andTrust in the Supreme Court of the State of New York, Monroe County.  DDRRES’ lawsuit alleges breach of contractand related claims arising from the liquidation and property managementservices that DDRRES was to perform. DDRRES’ lawsuit seeks monetary damages ofapproximately $98,000 and a judicial declaration that DDRES is entitled toretain construction management fees obtained from the Company in the amount ofapproximately $530,000.  The Trustdenies DDRRES’ claims and intends to vigorously defend against the lawsuit.

 

The Trust, 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 regarding various accounting issues. The Trust’s lawsuit allegesbreach of contract, breach of fiduciary duty, negligence, unfair business practicesand related claims against DDRRES, and the Trust is seeking more than $2.5million in damages. It is not yet clear whether the competing claims assertedby the Trust and DDRRES regarding DDRRES’ conduct as liquidator and propertymanager for the Company will proceed in New York or California. The Trustanticipates that the Courts will designate a single forum for these disputes inthe next few months.

 

**RVIP**

 

The Trust is currently involved in legal proceedings arising from salesby the Company of ten shopping centers to Prudential Insurance Company ofAmerica and its affiliates (collectively, “RVIP”) between December 2000 andApril 2001.

 

On December 17, 2002, the Trust filed an action in the Superior Courtof the State of California, County of Contra Costa, against RVIP and thePleasant Hill Redevelopment Agency seeking the return of a deposit paid by theCompany in connection with the development of a shopping center in PleasantHill, California.  The deposit at issueamounts to approximately $72,000, including interest. RVIP is contesting thelawsuit and claims that it should receive the deposit monies.

 

On January 21, 2003, RVIP filed a lawsuit in the Superior Court of theState of California, County of San Francisco, against the Company and theco-trustees of the Trust alleging breach of contract and related claims inconnection with RVIP’s purchase of several properties, including the PleasantHill shopping center and Plaza at Puente Hills in California. RVIP is seekingdamages of approximately $308,000.  TheTrust disputes RVIP’s claims and intends to assert cross-claims against RVIParising from these property sales.

 

29

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**General**

 

While the Trust has established reserves for anticipated costs relatingto the foregoing litigation matters (including attorneys fees and judgment andsettlement costs), there can be no assurance as to the outcome of any of theforegoing litigation or that the reserves established by the Trust will besufficient to offset such costs.  Ifcosts related to the foregoing litigation matters exceed the reservesestablished by the Trust, the estimated amount of future cash distributionscould be materially adversely affected.

 

The Company and the Trust are subject to other legal claims andproceedings that arise in the ordinary course of business.  The Trustees believe that the outcome ofthese other claims and proceedings will not have a material adverse effect onthe estimated amount of future cash distributions; however, there can be noassurance in this regard.

 

**10.****       SUBSEQUENTEVENTS**

 

The Trust has been advised that the U.S. Department of Labor hascommenced an investigation regarding the Company’s decision to suspend tradingby employees of shares of Company common stock held by them in the Company’s401(k) Plan for certain periods of time following the receipt of an unsolicitedproposal from Shottenstein Stores Corporation and certain of its affiliates inJuly 1999.  No formal claim has yet beenbrought by the Department of Labor.  Ifand when a formal claim is made, the Trustees will analyze the claim andrespond appropriately.

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

 

The Trust did not employ independent accountants to perform an audit onthe financial statements contained in this Form 10-K.

 

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**PART III**

 
| ITEM 10. |   | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. |
|----------|--------|-----------------------------------------------------|

 

**Information Regarding the Trustees**

 

The following table and biographical descriptions set forth certaininformation with respect to the Trustees. There is no family relationship between either Trustee of the Trust.

 
| **Name**           |   | **Age** |   | **Position  Held** |   |
|--------------------|--------|---------|--------|--------------------|--------|
|               |   |    |   |               |   |
| Scott C. Verges    |   | 49      |   | Co-Trustee         |   |
| Douglas P.  Wilson |   | 52      |   | Co-Trustee         |   |

 

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

 

**Trustee Biographies**

** **

SCOTT C. VERGES became a co-trustee of the Trust on June 28, 2002.  From December 15, 2000 through June 27,2002, Mr. Verges was Chief Executive Officer and President of the Company.  Prior to that time, Mr. Verges was GeneralCounsel of the Company since January 1999 and Chief Administrative Officer sinceMay 1999, and Interim Chief Executive Officer and Interim President sinceAugust 18, 2000.  Since June 1997, Mr.Verges has been associated with the law firm of MBV Law (formerly known asMandel Buder & Verges).  Prior tohis association with MBV Law, Mr. Verges was a principal in the law firm ofCassidy & Verges, which he co-founded in 1990.  Mr. Verges received his J.D. in 1980 from Boalt Hall School ofLaw at the University of California, Berkeley.

 

DOUGLAS P. WILSON became a co-trustee of the Trust on June 28,2002.  Mr. Wilson brings nearly 25 yearsof experience in problem resolution, development, and real estate management tohis Companies’ clients. During his career, Mr. Wilson also has overseen thedevelopment and management of nearly $3 billion in assets, including serving asreceiver for nearly 400 matters in both State and Federal courts. Prior tofounding the Douglas Wilson Companies in 1989, he was the managing generalpartner of the company that developed Symphony Towers, a $160 million,1.2-million square-foot office and hotel complex, downtown San Diego’s largestmixed-used project of its kind.

 
| ITEM 11. |   | TRUSTEE COMPENSATION. |
|----------|--------|-----------------------|

 

**Trustees**

 

Pursuant to Section 9.1 of the Liquidating Trust Agreement, in lieu ofcommissions or other compensation fixed by law for trustees, the co-trusteesare entitled to the following compensation:

 

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MR. VERGES.  Mr. Verges receivesan hourly rate of $500 for services rendered as co-trustee.  For services rendered for the period fromJune 28, 2002 through December 31, 2002, Mr. Verges was paid approximately$161,000.  Mr. Verges also receivesreimbursement for reasonable out-of-pocket expenses, which does not includeadministrative expenses.

 

MR. WILSON.  Mr. Wilson, eitherdirectly or indirectly through the Douglas Wilson Companies, receivesapplicable fees specified in the Liquidating Trust Agreement; provided,however, that such fees for base services shall not exceed in any particularmonth (1) $30,000 for the six-month period commencing June 28, 2002; (2)$25,000 for the two-month period immediately following such six-month period;(3) $22,500 for the two-month period following such two-month period; and (4)$20,000 thereafter and for the duration of the term of the Trust.  Pursuant to the Liquidating Trust Agreement,the Trust also paid the Douglas Wilson Companies $62,500 for services renderedin connection with the Trust prior to June 28, 2002.  The Douglas Wilson Companies also receives reimbursement for reasonableout-of-pocket expenses (which do not include occupancy costs and administrativeexpenses), including additional personnel that are needed to assist in mattersof litigation support, common area maintenance reconciliations and tenantresolution issues.  For servicesrendered for the period from June 28, 2002 through December 31, 2002, theDouglas Wilson Companies was paid approximately $242,000, which included  $163,000 for base services, $60,000 forlitigation support, including Lake Arrowhead litigation supervision whichinvolved Scott C. Verges and other former officers of the company and $19,000for costs associated with accounts receivable collections and tenant relatedissues.

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

 

**Principal Beneficiaries**

 

There is no public market for the Units of the Trust.  On June 27, 2002, the Company formallyclosed its stock transfer books and its Common Stock was delisted from the NewYork Stock Exchange.  On June 28, 2002,the Company filed a Form 15 with the SEC to terminate the registration of itsCommon Stock under the Exchange Act and its obligation to file periodic reportswith respect thereto.  The Units are nottransferable except by will, intestate succession or operation of law.

 

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The following table sets forth the beneficial ownership of Units as to(i) each Beneficiary that is known by the Trust to have beneficially ownedmore than five percent of the Units as of December 31, 2002; and(ii) each of the Trustees as of March 1, 2003, based on representations ofthe Trustees and filings through February 14, 2003 received by the Truston Schedule 13G under the Securities Exchange Act of 1934, as amended (the“Exchange Act”). All such information was provided by the persons listed.  All percentages have been calculated as ofMarch 1, 2003 and are based upon 32,928,220 Units outstanding at the close ofbusiness on such date.  Each person inthe table below has indicated that it has sole voting and investment power overthe Units listed.

 
| **Name and Address of Beneficial Owner**                                                   |   | **Number of  Units** |      | **Percent of  Class (%)** |   |
|--------------------------------------------------------------------------------------------|--------|----------------------|-----------|---------------------------|--------|
| Scott C. Verges                                                                            |   | 12,000               |      | *                         |   |
|                                                                                       |   |                 |      |                      |   |
| Douglas P.  Wilson                                                                         |   | 0                    |      | *                         |   |
|                                                                                       |   |                 |      |                      |   |
| All Trustees as  a group (2 persons)                                                       |   | 12,000               |      | *                         |   |
|                                                                                       |   |                 |      |                      |   |
| Double Play  Partners Limited Partnership  1391 Main St.  Springfield, MA 01103            |   | 3,787,000            |      | 11.5                      |   |
|                                                                                       |   |                 |      |                      |   |
| Deutsche Bank AG  Taunusanlage 12, D-60325  Frankfurt am Main  Federal Republic of Germany |   | 2,761,466            | (1)  | 8.4                       |   |

 

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*          Lessthan one percent

 

(1)                        Informationreported is based upon a Schedule 13G filed with the SEC on February 14,2003 reporting beneficial ownership as of December 31, 2002. TheSchedule 13G reports Units beneficially owned by the Corporate andInvestment Banking business group and the Corporate Investments business groupof Deutsche Bank AG and its subsidiaries and affiliates (collectively, “DBAG”),but does not reflect Units, if any, beneficially owned by any other businessgroup of DBAG.  The information reportedincludes 2,729,500 Units beneficially owned by DB Advisors, L.L.C., 31,600Units beneficially owned by Deutsche Bank Securities, Inc. and 366 Unitsbeneficially owned by Deutsche Bank AG London Branch.

 
| ITEM 13. |   | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. |
|----------|--------|-------------------------------------------------|

 

RELATIONSHIP WITH MBV LAW. Legal expenses paid to MBV Law for the period from June 28, 2002 throughDecember 31, 2002 were approximately $141,000. Mr. Verges, a co-trustee, is a non-equity employee of MBV Law and isentitled to devote a certain percentage of his time to providing services toMBV Law pursuant to the terms of his agreement with the Trust.  Prior to becoming Chief Executive Officer ofthe Company, Mr. Verges received up to approximately 10% of the gross revenuesreceived by MBV Law from Mr. Verges’ clients, including the Company.  Subsequent to Mr. Verges becoming ChiefExecutive Officer of the Company, no portion of his compensation from MBV Lawhas been related to revenues received by MBV Law from the Company and/or Trust.

 

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LAKE ARROWHEAD VILLAGE.  OnFebruary 22, 2002, the Company sold its interest in the Lake Arrowhead Villageshopping center to LAV, LLC, an entity in which Scott C. Verges, a co-trusteeof the Trust, is a member, for a net purchase price of approximately $19.1million.  Under the Purchase and SaleAgreement and Joint Escrow Instructions, dated as of November 26, 2001, assubsequently amended on February 12, 2002, (1) LAV, LLC agreed to assume all ofthe outstanding mortgage indebtedness secured by the asset in satisfaction ofthe payment of the purchase price, (2) the Company agreed to advance $2 million(the “Construction Credit”) into an escrow account to be controlled by themortgage lender from which LAV, LLC drew the entire amount which was necessaryto fund the costs of significant structural repairs to the center’s seawall andparking garage, and (3) Scott C. Verges agreed to repay a $500,000 portion ofthe Construction Credit advance and $377,000 of certain other credits in 30equal non interest-bearing monthly installments.  As of March 1, 2003, the remaining unpaid balance wasapproximately $555,000.  The $19.1million of outstanding mortgage indebtedness assumed by LAV, LLC bears interestat an annual rate of 9.20%, matures in 2011 and cannot be prepaid until2011.  Mr. Verges also separately agreedto forfeit all severance benefits, which would have cost the Company anaggregate of approximately $2.4 million, which he otherwise would have beenentitled to receive no later than January 15, 2002.

 
| ITEM 14. |   | CONTROLS AND PROCEDURES. |
|----------|--------|--------------------------|

 

Not applicable.

 

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**PART IV**

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

 
| (a) |   | FINANCIAL STATEMENT SCHEDULES |
|-----|--------|-------------------------------|

 

 
| (b) |   | REPORTS ON FORM 8-K |
|-----|--------|---------------------|

 

Form 8-K filed on October 21, 2002: Item 5, announcing that:

 

(i)            alawsuit originally filed in April 2002 by certain individuals and theirinvestment companies that owned interests in the Lake Arrowhead Villageproperty immediately before an affiliate of the Company acquired the propertywas settled and dismissed;

 

(ii)           onJune 28, 2002, the Trust closed on the sale of Central Shopping Center, locatedin Ventura, California, for approximately $3,000,000;

 

(iii)          onAugust 14, 2002, the Trust closed on the sale of the Palms to Pines shoppingcenter, located in Palm Desert, California, for approximately $3,200,000; and

 

(iv)          theTrustees of the Trust had determined to make a liquidating distribution in theamount of $0.50 per unit to the registered unitholders of the Trust payable onor about October 30, 2002.

 
| (c) |   | 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 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). |
|   |   |                                                                                                                                                                                                                                                                                                        |
| 21.1   |   | Subsidiaries of the Trust                                                                                                                                                                                                                                                                                   |

 

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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 31, 2003 |   |
|        |                       |                     |  |  |  |  |

 

SIGNATURES

 

Pursuant to the requirements of the SecuritiesExchange Act of 1934, this report has been signed below by the followingpersons on behalf of the Registrant and in the capacities and on the datesindicated.

 
| **Signature**        |   | **Title**  |           | **Date** |   |
|----------------------|--------|------------|----------------|----------|--------|
|                 |   |       |
| /s/ Scott C. Verges  |   |       |           |
| Scott C. Verges      |   | Co-Trustee | March 31, 2003 |
|                 |   |       |           |
| /s/ Douglas P.Wilson |   |       |           |
| Douglas P. Wilson    |   | Co-Trustee | March 31, 2003 |
|                      |        |            |                |          |        |  |

 

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