**SECURITIES AND EXCHANGECOMMISSION**

**Washington, D.C. 20549**

 

**FORM10-K**

 

| **ý**                                                                                                          | **Annual report pursuant to  Section 13 or 15(d) of the Securities Exchange Act of 1934** |
|---------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------|
| ** **                                                                                                          | ** **                                                                                |
| **For  the fiscal year ended December 31, 2004      Commission  file number 1-9524*** |

 

**BPPLIQUIDATING TRUST**

(Exact name of Registrant as specified in its Charter)

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

 

**(619) 641-1141**

Registrant’s telephone number, including area code

 

Securities registered pursuant to Section12(b) of the Act:  **None**

 

Securities registered pursuant to Section12(g) of the Act:  **None**

 

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.

YES o NO o

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

 

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.  

NotApplicable.

 

Indicate by check mark whether the Registrant is an accelerated filer(as defined in Exchange Act Rule 12b-2).

YES o NO ý

 

State the aggregate market value of the voting and non-voting commonequity held by non-affiliates as of June 30, 2003.

Not applicable.

 

The number of units of beneficial interest outstanding as of March 1,2005 was 32,928,220.

 

DOCUMENTS INCORPORATED BY REFERENCE

**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 Form15 on June 28, 2002, indicating its notice of termination of registration andfiling requirements.

 

 

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**PART I**

 

ITEM 1.          BUSINESS.

 

**Liquidation of 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.  The stockholders of the Company subsequentlyapproved the Plan of Liquidation at the 2000 Annual Meeting of Stockholdersheld 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) Scott C. Verges and Douglas P.Wilson (the “Trustees”), as co-trustees of the BPP Liquidating Trust (the “Trust”),in accordance with the Company’s Plan of Liquidation, and the Company wasdissolved.  The last day of trading ofthe Company’s common stock on the New York Stock Exchange was June 27, 2002(the “Record Date”), and the Company’s stock transfer books were closed as ofthe close of business on that date.  Inaddition, on June 28, 2002 the Company filed a Form 15 with the Securities andExchange Commission (the “SEC”) to terminate the registration of the Company’scommon stock under Section 12(b) of the Securities Exchange Act of 1934, asamended (the “Exchange Act”), and its obligation to file periodic reports.  The Company had previously received a no-actionletter from the SEC regarding the Exchange Act reporting obligations of theTrust.

 

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).

 

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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 and suchBeneficiary’s aggregate Units in the Trust. Subject to limited exceptions related to transfer by will, intestatesuccession or operation of law, the Units are not transferable.

 

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 is scheduled to terminate upon the earliest of (1) such timeas termination 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, i.e., June 28,2005.  The existence of the Trust may,however, be extended to such later date as the Trustees may designate if theydetermine that an extension is reasonably necessary to fulfill the purpose ofthe Trust and, prior to such extension, the Trustees shall have requested andreceived additional no-action assurances from the SEC.

 

As discussed in this Form 10-K under the heading “Legal Proceedings”,the Trust is involved in certain ongoing litigation and other legal claims andproceedings.  The Trustees havedetermined that an extension of the term of the Trust beyond June 28, 2005 isreasonably necessary in order to resolve such ongoing litigation.  Accordingly, the Trustees intend to file arequest for a no-action letter from the Division of Corporation Finance of theSEC (the “Division”) confirming that the Division will not recommendenforcement action to the SEC if the Trustees extend the term of the Trust forup to three years and continue to not register and file reports (except asspecified in the no-action letter) with respect to the Units.  There is no assurance that the Trust willreceive such no-action relief.  If theTrust does not receive such no-action relief, it may become subject to theregistration and reporting requirements of the Exchange Act.  The expense of compliance with the reportingobligations of the Exchange Act could significantly reduce the amount ofdistributions available to be made in respect of the Units, if any.  If the Trust is required to comply with theregistration and reporting requirements of the Exchange Act and fails to do so,it could be subject to fines and penalties, which could significantly reducethe amount available for future distributions, if any.

 

**Tax Treatment**

 

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

 

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**Reports to Beneficiaries; Meetings**

 

The Trust will issue annual reports to the Beneficiaries showing theassets and liabilities of the Trust at the end of each fiscal year and thereceipts and disbursements of the Trust for the period. The annual reports willalso describe the changes in the Trust’s assets during the reporting period andthe actions taken by the Trustees during the period. The Trustees are alsorequired to file with the SEC (1) an annual report on Form 10-K and (2)whenever a material event relating to the Trust occurs, a current report onForm 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.  Unless a different percentage is specified inthe Liquidating Trust Agreement with respect to a particular matter orapplicable law, the approval of Beneficiaries holding at least a majority ofthe Units is required to take action on any matter voted on by theBeneficiaries.  A Trustee may be removedat any time, with cause, by Beneficiaries having aggregate Units of at least amajority of the total Units held by all Beneficiaries.  Any Trustee may be removed at any time,without cause, by Beneficiaries having aggregate Units of at least two-thirdsof the total Units held by all Beneficiaries.

 

**Distributions**

 

The Trustees of the Trust have determined to make a liquidatingdistribution in the amount of $0.05 per Unit to the registered Beneficiaries ofthe Trust.  The Trustees anticipate thatthis distribution will be paid on or about March 7, 2005.  A letter from the Trustees of the Trust tothe registered Beneficiaries regarding the distribution and related matterswill accompany the payment of the distribution.

 

During the fiscal year ended December 31, 2004, the Trust made aliquidating distribution to the Beneficiaries of $0.15 per Unit on March 31,2004.  The Trustees estimate that theTrust, in addition to the March 7, 2005 distribution, will make futureaggregate cash distributions of approximately $0.08 per Unit based upon assetscurrently available and the collection of receivables, less amounts required tosettle liabilities as well as the levels of reserves deemed necessary orappropriate for known and unknown liabilities, and other considerations.  Because the estimate of additional cashdistributions is based on various assumptions and projections, there can be noassurance that the actual amount of distributions will not differ materiallyfrom the Trustees’ estimate.

 

During the fiscal year ended December 31, 2003, the Trust madeliquidating distributions to the Beneficiaries of $0.30 per Unit on August 15,2003, $0.10 per Unit on October 15, 2003 and $0.10 per Unit on December 15,2003, for a cumulative liquidating distribution of $0.50 per Unit for thefiscal year ended December 31, 2003.

 

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During the period from June 28, 2002 through December 31, 2002, theTrust made a liquidating distribution to the Beneficiaries of $0.50 per Unit asreported in the Trust’s Annual Report on Form 10-K for the period from June 28,2002 through December 31, 2002.

 

**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 and collection functionson behalf of the Trust.

 

ITEM2.          PROPERTIES.

 

**Property Ownership**

 

The Trust did not own interests in any real estate properties duringthe year ended December 31, 2004.

 

**Office Lease**

 

For the fiscal year ended December 31, 2004, the Trust paidapproximately $9,000 for office space. The Trust does not anticipate incurring any expense for office space forthe fiscal year ending December 31, 2005.

 

ITEM 3.          LEGALPROCEEDINGS.

 

**Lake Arrowhead Village**

 

In April 2001, a lawsuit was filed in the Superior Court of the Stateof California, County of Orange, by eleven 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 alleged 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.

 

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On January 17, 2003, the same eleven tenants who filed theaforementioned lawsuit in Orange County Superior Court, together with eightother tenants at the Company’s former Arrowhead Property, filed a lawsuit inthe Superior 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, LAV, LLC (the companythat purchased the property from the Company in February 2002), the formerowner of the property who had contributed the property to the Company, and manyof the individual and corporate managers and management companies of theproperty during the periods of the tenants’ leases.  LAV, LLC, is an entity in which Scott C.Verges, a co-trustee of the Trust, is a member. (See “Item 13 - Certain Relationships and Related Transactions”).

 

On March 10, 2003, the lawsuit was removed to the United StatesDistrict Court for the Central District of California, Eastern Division.  However, the tenants/plaintiffs voluntarilydismissed their RICO claim whereupon the lawsuit was sent back to the SanBernardino Superior Court.  By motionpractice which occurred over a period of eight months, six claims from thecomplaint and amendments thereto have been dismissed with prejudice (namely,false statement against realty, intentional interference with prospectivebusiness advantage, negligent interference with business advantage, waste,breach of the implied covenant of fair dealing and impress and forecloseequitable liens).  In between amendmentsof the complaint, one plaintiff (who was also a plaintiff in the earlierlawsuit) dropped out of the lawsuit.  Inaddition, two additional plaintiffs (who were both tenants under one lease)have subsequently dropped out and one plaintiff has been added.  There are currently seventeenplaintiffs.  The plaintiffs’ finalcomplaint alleges, among other claims, breach of contract, fraud, intentionalmisrepresentation and unfair business practices, and it alleges that theCompany overcharged these tenants for CAM. The plaintiffs are seeking an undisclosed amount of monetary damages.

 

With respect to the ten tenants who previously sued the Company andaccepted a compromise judgment in June 2002, the Trustees believe the claimsagainst the Company and the Trust are barred because they were previouslyadjudicated.  The Trustees also believethat all of the claims against the Company and the Trust, by all the plaintiffsin the aforementioned complaint, are without merit and will continue to vigorouslydefend against them.  The case is set fortrial commencing on September 12, 2005.

 

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In conjunction with the above described litigation, on February 4,2003, the Trust, through its broker, Marsh Risk & Insurance Services,tendered the complaint in the Underlying Action to American InternationalSpecialty Lines Insurance Company (“AISLIC”) under the Directors, Officers andCorporate Liability Insurance Policy for Real Estate Investment Trusts, PolicyNo. 473-95-69 (the “Policy”) issued by AISLIC to the Company for the periodfrom December 15, 2000 to December 15, 2002. The Policy provides a $20 million aggregate limit of liability, and a$150,000 retention for judgments, settlements and defense costs fornonsecurities claims.  The Policyrequires AISLIC to advance defense costs of any covered claim prior to itsfinal disposition. On March 25, 2004, AISLIC acknowledged in writing that theCompany, BPP/Arrowhead, L.P., BPP/Arrowhead, Inc., and Burnham PacificOperating Partnership, L.P. are covered under the Policy, as well as certainindividuals who were directors and/or officers of the Company. AISLIC declinedcoverage for the Trust and individuals who were sued in their capacity asTrustees for the Trust.  To date, theTrust has tendered to AISLIC defense bills totaling $831,794.37 incurred inconnection with the Underlying Action for the period through November 30,2004.  AISLIC has agreed to pay suchdefense costs subject to certain limitations, and to date, has paid$87,384.60.  AISLIC has informed theTrustees that they are continuing to review and process payments for thedefense bills.

 

**Developers Diversified Realty**

 

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

 

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 alleged breach of contractand related claims arising from the liquidation and property managementservices that DDRRES was to perform. DDRRES’ lawsuit sought monetary damages of approximately $98,000 and ajudicial declaration that DDRRES is entitled to retain construction managementfees obtained from the Company in the amount of approximately $530,000.  The trial court dismissed the lawsuit forlack of jurisdiction in August 2003. DDRRES appealed the trial court’s decision.  In November 2004, the New York appellatecourt issued a unanimous written opinion affirming the trial court’sdecision.  No further appeals areexpected.

 

The Trust, acting through its Trustees, filed a lawsuit on January 13,2003, against DDRRES in the Superior Court of the State of California, Countyof Contra Costa, based on DDRRES’ acts and omissions as the Company’sliquidator and property manager. The lawsuit, which the Trust amended in 2004to add DDRC as an additional defendant, alleges breach of contract, breach offiduciary duty, negligence, unfair business practices and related claims.  The Trust is seeking more than $2.5 millionin damages.  DDRRES and DDRC filed across-complaint in 2004 seeking monetary damages of approximately $98,000 fornon-payment of asset management fees. Trial is scheduled to commence on July11, 2005.

 

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**RVIP**

 

Until recently, the Trust was involved in legal proceedings arisingfrom sales by the Company of ten shopping centers to Prudential InsuranceCompany of America and its affiliates (collectively, “RVIP”) between December2000 and April 2001.

 

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’s complaintsought damages of approximately $308,000. The Trust disputed RVIP’s claims, and in August 2003 filed an amendedcross-complaint seeking damages of more than $250,000 based on RVIP’s breach ofcontract and related claims.  The partiesreached a confidential settlement in February 2004.  The lawsuit was dismissed with prejudice inMay 2004, including all claims contained in RVIP’s complaint and the Trust’scross-complaint.

 

**RVIP and Sparks, Inc.**

 

The Trust is also involved in legal proceedings arising from a sale bythe Company of a shopping center in Richmond, California, to Prudential RealEstate Investors, DDRC and Coventry Partners (collectively, “RVIP”) in April2001.  Sparks, Inc. (“Sparks”) is arestaurant tenant at the shopping center. In April 2004, Sparks filed an action in the Superior Court of the Stateof California, County of Contra Costa, against RVIP and the Trust for damagesand specific performance.  Sparks seeksto enforce an option to purchase the restaurant premises.  As to the Trust, Sparks seeks unspecifieddamages for breach of a retail lease and breach of the implied covenant of goodfaith and fair dealing.  In August 2004,the Trust filed a cross-complaint for indemnity against RVIP.  In December 2004, the Trust filed an answerto Sparks’ complaint that denies all of Sparks’ liability and damagesclaims.  The Trust also filed a motionfor summary judgment, which is scheduled for hearing in March 2005.  Trial is scheduled to commence on April 4,2005.

 

**Department of Labor**

 

The Trust has entered into a Settlement Agreement with the U.S.Department of Labor regarding the Company’s decision to suspend trading ofshares of Company common stock held by employees in the Company’s 401(k).  The Settlement Agreement between theDepartment of Labor and the Company fully released the Company from futureliabilities relating to this matter and required the Company to payreimbursements and penalties in the total amount of approximately $62,370.  This amount was paid in full in 2004.

 

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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 Trust believes that the outcome of theseother claims and proceedings will not have a material adverse effect on theestimated amount of future cash distributions; however, there can be noassurance in this regard.

 

ITEM4.          SUBMISSION OF MATTERS TO A VOTE OFBENEFICIARIES.

 

No matters were submitted to a vote of the Beneficiaries during thefiscal year ended December 31, 2004.

 

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**PART II**

 

ITEM 5.          MARKETFOR REGISTRANT’S COMMON EQUITY, RELATED BENEFICIARY MATTERS AND ISSUERPURCHASES OF EQUITY SECURITIES.

 

**Market Information**

 

There is no public market for the Units of the Trust.  On June 27, 2002, the Company formally closedits stock transfer books and its common stock was delisted from the New YorkStock Exchange.  On June 28, 2002, theCompany 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 March 1, 2005,the Trust had approximately 1,505 Beneficiaries of record and 32,928,220 Unitsoutstanding.

 

**Distributions**

 

During the fiscal year ended December 31, 2004, the Trust made aliquidating distribution to the Beneficiaries of $0.15 per Unit on March 31,2004.

 

During the fiscal year ended December 31, 2003, the Trust madeliquidating distributions to the Beneficiaries of $0.30 per Unit on August 15,2003, $0.10 per Unit on October 15, 2003 and $0.10 per Unit on December 15,2003, for a cumulative liquidating distribution of $0.50 per Unit for thefiscal year ended December 31, 2003.

 

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.          SELECTEDFINANCIAL 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.  These historical results are notnecessarily indicative of the results to be expected in the future.

 

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

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

 

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

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

 

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

 

**Forward-looking Statements and Risk Factors**

 

Certain statements contained in this Annual Report on Form 10-K thatare not historical constitute “forward-looking statements.”  You can identify forward-looking statementsby our use of the words “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.

 

**Risk-Factors**

 

**The amounts and timing of distributions maybe adversely affected by liabilities and indemnification obligations survivingasset sales.**

 

In selling our assets, in some cases, we have not been able tonegotiate agreements that provide for the buyers to assume all of the known andunknown liabilities relating to the assets, including, without limitation,environmental and structural liabilities. In addition, we have agreed, in some cases, to indemnify the buyers forall or some such liabilities.  As aresult, we have from time to time determined, and we may in the futuredetermine, that it is necessary or appropriate to reserve cash amounts orobtain insurance in order to attempt to cover the liabilities not assumed bythe buyers and to cover potential indemnifiable losses.  There can be no assurance that the reservesand insurance will be sufficient to satisfy all liabilities and indemnificationobligations arising from assets previously sold by the Company, and anyinsufficiencies may have a material adverse effect on the amounts and timing ofany distributions.

 

**We may encounter increased difficulty incollecting the accounts receivable associated with the properties that theCompany and the Trust previously sold.**

 

When we sold our properties, we generally retained the associatedaccounts receivable because the purchasers of real estate were not willing toassume the risk of collection.  The Trustis attempting to collect the remaining accounts receivable associated withvarious properties sold by the Company and the Trust.  Our ability to collect the accountsreceivable depends significantly on our collection efforts and the debtor’sfinancial ability to pay.  Because theTrust has no direct relationship or significant leverage with the debtors afterthese 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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**The liquidation of our assets may result inthe expedited filing of lawsuits against the Trust.**

 

Because of the Trust’s liquidation of assets formerly owned by theCompany, it may be more likely that third parties will decide to file lawsuitsagainst the Trust and that they will expedite the filing of such lawsuits.  Since the formation of the Trust on June 28,2002, the Trust has been named as a defendant in several lawsuits.  (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.

 

**We could incur costs from environmentalproblems even though we did not cause, contribute to or know about them.**

 

Because we owned, operated and supervised 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 a former owner oroperator of those properties or as having arranged for the disposal ortreatment of hazardous or toxic substances. As a result, we could incur costs associated with the removal orremediation of such substances from our sold properties.  Federal, state and local laws often imposeliability regardless of whether the owner or operator, or former owner oroperator, knew of, or was responsible for, the presence of the hazardous ortoxic substances.  Furthermore, a personwho arranges for the disposal or treatment of hazardous or toxic substances mayalso be liable for the costs of removing or remediating the substances at thedisposal or treatment facility, whether or not that person owns or operates thefacility.  In addition, we might incurother costs, including governmental fines and costs related to personalinjuries and property damage, resulting from the environmental condition of oursold properties, regardless of whether we actually had knowledge of orcontributed to those conditions.  Forexample, environmental laws may impose liability for the release ofasbestos-containing materials into the air. If we were ever held responsible for releasing asbestos-containingmaterials, third parties could seek recovery from us for personalinjuries.  There can be no assurance thatcosts related to the environmental condition of our sold properties, or theamount of property or personal injury damages related to such conditions andattributable to the Trust, will not have a material adverse effect on theamounts and timing of any distributions made to the Trust’s Beneficiaries.

 

**We may be unable to obtain additional no-actionassurances from the SEC.**

 

As described above, the Trustees have determined that an extension ofthe term of the Trust beyond June 28, 2005 is reasonably necessary in order toresolve ongoing litigation.  There is noassurance that the Trust will receive a no-action letter from the Divisionconfirming that the Division will not recommend enforcement action to the SECif the Trustees extend the term of the Trust for up to three years and continueto not register and file reports (except as specified in the no-action letter)with respect to the Units.  If the Trustdoes not receive such no-action relief, it may become subject to theregistration and reporting requirements of the Exchange Act.  The expense of compliance with the reportingobligations of the Exchange Act could significantly reduce the amount ofdistributions available to be made in respect of the Units, if any.  If the Trust is required to comply with theregistration and reporting requirements of the Exchange Act and fails to do so,it could be subject to fines and penalties, which could significantly reducethe amount available for future distributions, if any.

 

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**Overview**

 

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

 

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 andliabilities are stated at their estimated settlement amounts, includingestimated costs associated with carrying out the liquidation.  Actual values realized for assets andsettlement of liabilities may differ materially from the amounts estimated dueto the risk factors discussed in this Annual Report on Form 10-K.

 

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 Trust recorded a net loss of -$53,000 (-$0.0016 per Unit) for thefiscal year ended December 31, 2004 compared to net income of $26,000 ($0.0008per Unit) for the fiscal year ended December 31, 2003.  During the fiscal year ended December 31,2004, net income was unfavorably impacted by the absence of rental revenue anda decrease in interest revenue as offset by the related absence of rentaloperating and interest expense as well as an overall decrease in general andadministrative expenses.

 

The Trust recorded net income of $26,000 ($0.0008 per Unit) for thefiscal year ended December 31, 2003 compared to a net loss of $372,000 (-$0.01per Unit) for the period from June 28, 2002 through December 31, 2002.  Net income increased primarily due to adecrease in general and administrative, litigation and legal expenses incurredby the Trust during the fiscal year ended December 31, 2003.  General and administrative expenses includethe costs and expenses of consultants, receivable collections, Beneficiarycommunications and other general office expenses.

 

13

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

 

Under the liquidation basis of accounting, costs associated withliquidating the Trust’s assets must be estimated and accrued in a reserveaccount.  These amounts can varysignificantly due to, among other things, the costs of retaining personnel andone or more trustees to oversee the liquidation, the costs of insurance, thetiming and amounts associated with discharging known and contingentliabilities, and the costs associated with cessation of the Trust’s operations.  These costs are estimates and are expected tobe incurred over the remaining period of the Trust.

 

On December 31, 2003, the Reserve balance was $3,913,000.  During the fiscal year ended December 31,2004, the Trust made payments against the Reserve in the amount of $1,664,000and reserved an additional $2,612,000, resulting in a December 31, 2004 Reservebalance of $4,861,000.

 

On December 31, 2002, the Reserve balance was $6,146,000.  During the fiscal year ended December 31,2003, the Trust made payments against the Reserve in the amount of $2,795,000and reserved an additional $562,000, resulting in a December 31, 2003 Reservebalance of $3,913,000.

 

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 againstthe Reserve in the amount of $3,041,000 resulting in a December 31, 2002Reserve balance of $6,146,000.

 

**Net Assets in Liquidation**

 

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

 

Net Assets in Liquidation at December 31, 2003 were $11,620,000 or$0.35 per Unit compared to $26,509,000 or $0.81 per Unit as of December 31,2002.  The $14,889,000 decrease in NetAssets in Liquidation was primarily attributable to the liquidatingdistributions made to the Beneficiaries totaling $16,466,000 during the fiscalyear ended December 31, 2003, which were partially offset by increases in NetAssets in Liquidation due to the sales of Gateway Center and the note on SimiValley Plaza as well as the receipt of funds from miscellaneous settlements andcollections.

 

The valuation of Net Assets in Liquidation is based on estimates as ofDecember 31, 2004, and the actual values realized for assets and settlement ofliabilities may differ materially from the amounts estimated.

 

14

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**Distributions**

 

The Trustees of the Trust have determined tomake a liquidating distribution in the amount of $0.05 per Unit to theregistered Beneficiaries of the Trust. The Trustees anticipate that this distribution will be paid on or aboutMarch 7, 2005.  A letter from theTrustees of the Trust to the registered Beneficiaries regarding thedistribution and related matters will accompany the payment of thedistribution.

 

During the fiscal year ended December 31, 2004,the Trust made a liquidating distribution to the Beneficiaries of $0.15 perUnit on March 31, 2004.  The Trusteesestimate that the Trust, in addition to the March 7, 2005 distribution, willmake future aggregate cash distributions of approximately $0.08 per Unit basedupon assets currently available and the collection of receivables, less amountsrequired to settle liabilities as well as the levels of reserves deemednecessary or appropriate for known and unknown liabilities, and otherconsiderations.  Because the estimate ofadditional cash distributions is based on various assumptions and projections,there can be no assurance that the actual amount of distributions will notdiffer materially from the Trustees’ estimate.

 

During the fiscal year ended December 31, 2003,the Trust made liquidating distributions to the Beneficiaries of $0.30 per Uniton August 15, 2003, $0.10 per Unit on October 15, 2003 and $0.10 per Unit onDecember 15, 2003, for a cumulative liquidating distribution of $0.50 per Unitfor the fiscal year ended December 31, 2003.

 

During the period from June 28, 2002 throughDecember 31, 2002, the Trust made a liquidating distribution to theBeneficiaries of $0.50 per Unit as reported in the Trust’s Annual Report onForm 10-K for the period from June 28, 2002 through December 31, 2002.

 

**Dispositions**

 

The Trust did not own interests in any realestate properties during the fiscal year ended December 31, 2004.

 

During the fiscal year ended December 31, 2003,the Trust sold Gateway Center (formerly known as Marin City) for aggregateproceeds of approximately $5.9 million in cash. On September 29, 2003, the note on Simi Valley Plaza, the Trust’s soleremaining property, was sold, terminating the Trust’s ownership interest in theproperty.

 

During the period from June 28, 2002 throughDecember 31, 2002, the Trust sold the Central and Palms to Pines shoppingcenters for aggregate proceeds of approximately $6.2 million in cash.

 

15

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# **Liquidity and Capital Resources**

 

As of December 31, 2004, the Trust did not owninterest in any real estate property, and does not intend to acquire anyproperties or engage in any operating activities.  The Trust’s two remaining properties weresold during the fiscal year ended December 31, 2003.  Accordingly, the Trust’s sources of liquidityas of December 31, 2004, are its cash reserve of approximately $10,361,000, andapproximately $76,000 in accounts receivable.

 

The liquidity needs of the Trust in connectionwith the winding up of the Company are potential litigation expenses, trusteeexpenses, insurance costs, general and administrative expenses as describedunder “Results of Operations” and costs associated with cessation of the Trust’soperations.

 

While there can be no assurance that the Trust’scash reserves will be sufficient to satisfy these expenses over the remainingterm of the Trust, the Trustees anticipate that the Trust’s net assets aresufficient to meet all anticipated liquidity requirements.

 

**Off-Balance Sheet Arrangements**

 

Not applicable.

 

**Contractual Obligations**

 

Not applicable.

 

ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURESABOUT MARKET RISK. 

 

The Trust does not have any existing debt anddoes not expect to incur any additional indebtedness.  Accordingly, the Trust does not believe thatfuture interest rate fluctuations will have a material effect on theTrust.  The Trust does not utilizefinancial instruments for trading or other speculative purposes.

 

16

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ITEM 8.          FINANCIALSTATEMENTS AND SUPPLEMENTARY DATA.

 

BPP LIQUIDATING TRUST

CONSOLIDATED STATEMENT OF NET ASSETS (LIQUIDATION BASIS)

DECEMBER 31, 2004, 2003, and 2002

(unaudited)

(in thousands)

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

 

See the Accompanying Notes

 

17

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BPP LIQUIDATING TRUST

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS (LIQUIDATION BASIS)

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

(unaudited)

(in thousands, except per Unit amounts)

 
| ** **                                                                                              | ** ** | **January 1, 2004  through  December 31,  2004** | ** ** | **January 1, 2003  through  December 31,  2003** | ** ** | **June 28, 2002  through  December 31,  2002** | ** ** |
|---------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------|------------|------------------------------------------------|------------|
|                                                                                                    |       |                                             |       |                                             |       |                                           |       |
| REVENUES                                                                                                |       |                                             |       |                                             |       |                                           |       |
|                                                                                                    |       |                                             |       |                                             |       |                                           |       |
| Rents                                                                                                   |       | $                                                | —     |                                             | $          | 1,945                                          |       | $ | 1,793 |   |
| Interest and Other Income                                                                               |       | 125                                              |       | 243                                              |       | 383                                            |       |
|                                                                                                    |       |                                             |       |                                             |       |                                           |       |
| Total Revenues                                                                                          |       | 125                                              |       | 2,188                                            |       | 2,176                                          |       |
|                                                                                                    |       |                                             |       |                                             |       |                                           |       |
| COSTS AND EXPENSES                                                                                      |       |                                             |       |                                             |       |                                           |       |
|                                                                                                    |       |                                             |       |                                             |       |                                           |       |
| Interest                                                                                                |       | —                                           |       | 676                                              |       | 591                                            |       |
| Rental Operating                                                                                        |       | —                                           |       | 614                                              |       | 584                                            |       |
| Provision for Bad Debt                                                                                  |       | —                                           |       | —                                           |       | 35                                             |       |
| General and Administrative                                                                              |       | 178                                              |       | 872                                              |       | 1,180                                          |       |
| Litigation and Legal                                                                                    |       | —                                           |       | —                                           |       | 158                                            |       |
|                                                                                                    |       |                                             |       |                                             |       |                                           |       |
| Total Costs and Expenses                                                                                |       | 178                                              |       | 2,162                                            |       | 2,548                                          |       |
|                                                                                                    |       |                                             |       |                                             |       |                                           |       |
| Net Income/(Loss)                                                                                       |       | (53                                              | )          | 26                                               |       | (372                                           | )          |
|                                                                                                    |       |                                             |       |                                             |       |                                           |       |
| Net Assets at December 31, 2003, December  31, 2002 and June 28, 2002, respectively                     |       | 11,620                                           |       | 26,509                                           |       | 43,344                                         |       |
|                                                                                                    |       |                                             |       |                                             |       |                                           |       |
| Adjustments to Net Assets in Liquidation                                                                |       | (1,463                                           | )          | 1,551                                            |       | 3                                              |       |
|                                                                                                    |       |                                             |       |                                             |       |                                           |       |
| Liquidating Distributions                                                                               |       | (4,940                                           | )          | (16,466                                          | )          | (16,466                                        | )          |
|                                                                                                    |       |                                             |       |                                             |       |                                           |       |
| Net Assets in Liquidation at December 31,  2004, December 31, 2003, and December 31, 2002, respectively |       | $                                                | 5,164      |                                             | $          | 11,620                                         |       | $ | 26,509 |   |
|                                                                                                    |       |                                             |       |                                             |       |                                           |       |
| Income/(Loss) Per Unit                                                                                  |       | $                                                | (0.0016    | )                                                | $          | 0.0008                                         |       | $ | (0.01 | ) |

 

18

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BPP LIQUIDATING TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS (LIQUIDATION BASIS)

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

(unaudited)

(in thousands)

 
| ** **                                                                                                                                                                                 | ** ** | **January 1,  2004 through  December 31,  2004** | ** ** | **January 1,  2003 through  December 31,  2003** | ** ** | **June 28, 2002  through  December 31,  2002** | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------|------------|------------------------------------------------|------------|
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                                                                                      |       |                                             |       |                                             |       |                                           |       |
| Net Income                                                                                                                                                                                 |       | $                                                | (53        | )                                                | $          | 26                                             |       | $ | (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                                                                                                                                                               |       | 1,001                                            |       | 1,688                                            |       | 1,397                                          |       |
| Accounts Payable and Other Liabilities                                                                                                                                                     |       | (211                                             | )          | (623                                             | )          | (1,002                                         | )          |
| Tenant Security Deposits                                                                                                                                                                   |       | —                                           |       | (2                                               | )          | (69                                            | )          |
| Reserves for Estimated Costs During the  Period of Liquidation                                                                                                                             |       | (1,664                                           | )          | (2,795                                           | )          | (3,041                                         | )          |
| Recognition of Deferred Gain                                                                                                                                                               |       | —                                           |       | —                                           |       | (66                                            | )          |
| Miscellaneous Settlements and Collections                                                                                                                                                  |       | 780                                              |       | 689                                              |       | —                                         |       |
| Net Cash Used for Operating Activities                                                                                                                                                     |       | (147                                             | )          | (1,017                                           | )          | (3,118                                         | )          |
|                                                                                                                                                                                       |       |                                             |       |                                             |       |                                           |       |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                                                                                                                      |       |                                             |       |                                             |       |                                           |       |
| Proceeds from Sales of Real Estate                                                                                                                                                         |       | —                                           |       | 5,920                                            |       | 6,200                                          |       |
| Post Closing Costs from Sales of Real  Estate                                                                                                                                              |       | —                                           |       | —                                           |       | (133                                           | )          |
| Net Cash Provided by Investing Activities                                                                                                                                                  |       | —                                           |       | 5,920                                            |       | 6,067                                          |       |
|                                                                                                                                                                                       |       |                                             |       |                                             |       |                                           |       |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                                                                                                                      |       |                                             |       |                                             |       |                                           |       |
| Principal Payments of Notes Payable                                                                                                                                                        |       | —                                           |       | (194                                             | )          | (153                                           | )          |
| Restricted Cash                                                                                                                                                                            |       | —                                           |       | 394                                              |       | 321                                            |       |
| Liquidating Distributions Paid                                                                                                                                                             |       | (4,940                                           | )          | (16,466                                          | )          | (16,466                                        | )          |
| Net Cash Used for Financing Activities                                                                                                                                                     |       | (4,940                                           | )          | (16,266                                          | )          | (16,298                                        | )          |
|                                                                                                                                                                                       |       |                                             |       |                                             |       |                                           |       |
| Net Decrease in Cash and Cash Equivalents                                                                                                                                                  |       | (5,087                                           | )          | (11,363                                          | )          | (13,349                                        | )          |
| Cash and Cash Equivalents at Beginning of  Period                                                                                                                                          |       | 15,448                                           |       | 26,811                                           |       | 40,160                                         |       |
|                                                                                                                                                                                       |       |                                             |       |                                             |       |                                           |       |
| Cash and Cash Equivalents at End of Period                                                                                                                                                 |       | $                                                | 10,361     |                                             | $          | 15,448                                         |       | $ | 26,811 |   |
|                                                                                                                                                                                       |       |                                             |       |                                             |       |                                           |       |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                                                                                                                                         |       |                                             |       |                                             |       |                                           |       |
|                                                                                                                                                                                       |       |                                             |       |                                             |       |                                           |       |
| Cash Paid for Interest During the fiscal  year ended December 31, 2004, the fiscal year ended December 31, 2003 and the  period from June 28, 2002 through December 31, 2002, respectively |       | $                                                | —     |                                             | $          | 737                                            |       | $ | 591 |   |

 

19

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**BPP LIQUIDATING TRUST**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**December 31, 2004**

 

**1.****              PURPOSE OF THE BPPLIQUIDATING TRUST**

 

On August 31, 2000, the Board of Directors ofBurnham Pacific Properties, Inc. (the “Company”) adopted a Plan of CompleteLiquidation and Dissolution (the “Plan of Liquidation”) and directed that thePlan of Liquidation be submitted to the Company’s stockholders forapproval.  The stockholders of theCompany subsequently approved the Plan of Liquidation at the 2000 AnnualMeeting of Stockholders held on December 15, 2000.

 

The Plan of Liquidation contemplated the orderlysale of all of the Company’s assets for cash or such other form ofconsideration as may be conveniently distributed to the Company’s stockholdersand the payment of (or provision for) the Company’s liabilities and expenses,as well as the establishment of reserves to fund the Company’s contingentliabilities.  The Plan of Liquidationgave the Company’s Board of Directors the power to sell any or all of theassets of the Company without further approval by the stockholders and requiredthat the final liquidating distribution, either directly to stockholders or toa liquidating trust, be made no later than December 15, 2002.

 

On June 28, 2002, the Company transferred itsremaining assets to (and its remaining liabilities were assumed by) Scott C.Verges and Douglas P. Wilson (the “Trustees”), as co-trustees of the BPPLiquidating Trust (the “Trust”), in accordance with the Company’s Plan ofLiquidation, and the Company was dissolved. The last day of trading of the Company’s common stock on the New YorkStock Exchange was June 27, 2002 (the “Record Date”), and the Company’s stocktransfer books were closed as of the close of business on that date.  In addition, on June 28, 2002 the Companyfiled a Form 15 with the Securities and Exchange Commission (the “SEC”) toterminate the registration of the Company’s common stock under Section 12(b) ofthe Securities Exchange Act of 1934, as amended (the “Exchange Act”), and itsobligation to file periodic reports.  TheCompany had previously received a no-action letter from the SEC regarding theExchange Act reporting obligations of the Trust.

 

During the period of liquidation from December16, 2000 through June 27, 2002, the Company assigned, sold or otherwisedisposed of all of its real estate assets except its interests in fourproperties:  Palms to Pines ShoppingCenter, Central Shopping Center, Simi Valley Plaza and Gateway Center (formerlyknown as Marin City).

 

20

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Under the terms of the Liquidating TrustAgreement executed by the Company and the Trustees on June 28, 2002, eachstockholder of the Company on the Record Date (each, a “Beneficiary”)automatically became the holder of one unit of beneficial interest (a “Unit”)in the Trust for each share of Company common stock then held of record by suchstockholder, and all outstanding shares of Company common stock wereautomatically deemed cancelled. Stockholders of the Company on the Record Date were not required to takeany action to receive their Units.  Therights of Beneficiaries in their Units are not represented by any form ofcertificate or other instrument. The Trust’s agent maintains a record of thename and address of each Beneficiary and such Beneficiary’s aggregate Units inthe Trust.  Subject to limited exceptionsrelated to transfer by will, intestate succession or operation of law, theUnits are not transferable, nor does a Beneficiary have authority or power tosell or in any other manner dispose of any Units.

 

The Trust was established for the sole purposeof winding up the Company’s affairs and the liquidation of its assets with noobjective to continue or engage in the conduct of a trade or business or causeany subsidiary to continue or engage in the conduct of a trade or business,except as necessary for the orderly liquidation of the Trust’s assets.

 

The Trust is scheduled to terminate upon theearliest of (1) such time as termination is required by the applicable laws ofthe State of Maryland, (2) the distribution of all the Trust’s assets inaccordance with the terms of the Liquidating Trust Agreement, or (3) theexpiration of a period of three years from the date assets were firsttransferred to the Trust, i.e., June 28, 2005. The existence of the Trust may, however, be extended to such later dateas the Trustees may designate if they determine that an extension is reasonablynecessary to fulfill the purpose of the Trust and, prior to such extension, theTrustees shall have requested and received additional no-action assurances fromthe SEC.

 

As discussed in this Form 10-K under the heading“Legal Proceedings”, the Trust is involved in certain ongoing litigation andother legal claims and proceedings.  TheTrustees have determined that an extension of the term of the Trust beyond June28, 2005 is reasonably necessary in order to resolve such ongoing litigation.  Accordingly, the Trustees intend to file arequest for a no-action letter from the Division of Corporation Finance of theSEC (the “Division”) confirming that the Division will not recommendenforcement action to the SEC if the Trustees extend the term of the Trust forup to three years and continue to not register and file reports (except asspecified in the no-action letter) with respect to the Units.  There is no assurance that the Trust willreceive such no-action relief.  If theTrust does not receive such no-action relief, it may become subject to theregistration and reporting requirements of the Exchange Act.  The expense of compliance with the reportingobligations of the Exchange Act could significantly reduce the amount ofdistributions available to be made in respect of the Units, if any.  If the Trust is required to comply with theregistration and reporting requirements of the Exchange Act and fails to do so,it could be subject to fines and penalties, which could significantly reducethe amount available for future distributions, if any.

 

21

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**2.****              SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES**

 

## **Basis of Presentation**

 

The Trust has adopted the liquidation basis ofaccounting.  Under the liquidation basisof accounting, assets are stated at their estimated net realizable values andliabilities, including the reserve for estimated costs during the period ofliquidation, are stated at their anticipated settlement amounts.  The valuations of other assets andliabilities under the liquidation basis of accounting are based on the Trustees’estimates as of December 31, 2004.  Theactual values realized for assets and settlement of liabilities may differmaterially from the amounts estimated.

 

## **Use of Estimates**

 

The preparation of financial statements inconformity with accounting principles generally accepted in the United Statesof America requires the Trustees to make estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingentassets and liabilities at the date of the financial statements and the reportedamounts of revenues and expenses during the reporting period.  Actual results could differ materially fromthose estimates.

 

## **Assets and Liabilities Transferred to the Trust**

 

The Company transferred the following assets andliabilities to the Trust 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 andaccordingly, will not be subject to federal or state income tax on any incomeearned or gain recognized by the Trust. The Trust will recognize taxable gainor loss when an asset is disposed of for an amount greater or less than thefair market value of such asset at the time it was transferred from the Companyto the Trust.  Each Beneficiary of theTrust will be treated as the owner of a pro rata portion of each asset,including cash, received by and held by the Trust and will be required toreport on his or her federal and state income tax return his or her pro ratashare of taxable income, including gains and losses recognized by the Trust.Accordingly, there is no provision for federal or state income taxes in theaccompanying consolidated financial statements.

 

22

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

 

The Trust did not own interests in any realestate properties at December 31, 2004.

##  

## **Cash and Cash Equivalents**

 

For purposes of reporting cash flows, cash andcash equivalents include cash and certificates of deposit with originalmaturities of three months or less.

 

## **Receivables -Net**

 

Receivables are net of an allowance for doubtfulaccounts of approximately $808,000.

##  

## **Financial Instruments**

 

The carrying values reflected in the consolidated statement of netassets at December 31, 2004 reasonably approximate the fair values for cash andcash equivalents, receivables, and accounts payable.

 

**Adjustment to Deferred Gain on Real Estate 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.  Uponthe sale of Palms to Pines shopping center in August 2002, the entire remainingamount of deferred gain on real estate assets was recognized.

 

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

 

Under the liquidation basis of accounting, costs associated withliquidating the Trust’s assets must be estimated and accrued in a reserveaccount.  These amounts can varysignificantly due to, among other things, the costs of retaining personnel andone or more trustees to oversee the liquidation, the costs of insurance, thetiming and amounts associated with discharging known and contingent liabilitiesand the costs associated with cessation of the Trust’s operations.  These costs are estimates and are expected tobe incurred over the remaining Trust period.

 

On December 31, 2002, the Reserve balance was $6,146,000.  During the Fiscal Year ended December 31,2003, the Trust made payments against the Reserve in the amount of $2,795,000and reserved an additional $562,000, resulting in a December 31, 2003 Reservebalance of $3,913,000.  During the fiscalyear ended December 31, 2004, the Trust made payments against the Reserve inthe amount of $1,664,000 and reserved an additional $2,612,000, resulting in aDecember 31, 2004 Reserve balance of $4,861,000.

 

## **Recent Accounting Pronouncements**

 

Not Applicable.

 

23

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## **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 were recognized when tenants’ sales exceeded theirsales breakpoint.

##  

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

 

Net income/(loss) per Unit is calculated using the weighted-averagenumber of Units outstanding at December 31, 2004, December 31, 2003 andDecember 31, 2002, respectively.  Thefollowing table shows the net income/(loss) per Unit computation for the fiscalyear ended December 31, 2004, December 31, 2003 and for the period from June28, 2002 through December 31, 2002 (in thousands except per Unit amount).

 
| ** **                                                                       | ** ** | **January 1,  2004  through  December  31, 2004** | ** ** | **January 1,  2003  through  December  31, 2003** | ** ** | **June 28,  2002  through  December  31, 2002** | ** ** |
|----------------------------------------------------------------------------------|------------|---------------------------------------------------|------------|---------------------------------------------------|------------|-------------------------------------------------|------------|
|                                                                             |       |                                              |       |                                              |       |                                            |       |
| Net Income/(Loss)                                                                |       | $                                                 | (53        | )                                                 | $          | 26                                              |       | $ | (372 | ) |
| Units Outstanding at December 31, 2004,  December 31, 2003 and December 31, 2002 |       | 32,928                                            |       | 32,928                                            |       | 32,928                                          |       |
| Net Income/(Loss) Per Unit                                                       |       | $                                                 | (0.0016    | )                                                 | $          | 0.0008                                          |       | $ | (0.01 | ) |

 

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

 

The Trust did not own interests in any real estate properties atDecember 31, 2004.

 

**4.****              SALES OF REAL ESTATE**

 

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

 

**Gateway Center**

 

During the fiscal year ended December 31, 2003, the Trust sold GatewayCenter (formerly known as Marin City and located in Marin City, California) foraggregate proceeds of $5.9 million in cash.

 

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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 (the “Simi Property”).  As a result, the Simi Property no longerproduced enough cash income to make the required debt service payments to thelender and in June 2002, control of the Simi Property was transferred to aReceiver.

 

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

 

In August 2003, the Trust negotiated and received a payment of $400,000in consideration for not transferring its interest in the Simi Property duringnegotiations relating to the sale of the note (the “Note”) on the SimiProperty.  In September 2003, the Trustwas informed that the holder of the Note sold the Note to an outside thirdparty, and the buyer of the Note subsequently sold the Simi Property, throughauction, on September 29, 2003.

 

The sale of the Simi Property terminated the Trust’s ownership interestin the property.  At the time the SimiProperty was transferred to the Receiver, the Trust wrote down its netrealizable value to the mortgage amount. Accordingly, the only impact on the financial operations of the Trustrelated to the sale of the Simi Property was the receipt of the $400,000 feedescribed above.

 

**5.****              LIQUIDATINGDISTRIBUTIONS**

 

During the fiscal year ended December 31, 2004, the Trust made aliquidating distribution to the Beneficiaries of $4,940,000 ($0.15 per Unit) onMarch 31, 2004.

 

During the fiscal year ended December 31, 2003, the Trust madeliquidating distributions to the Beneficiaries of $9,880,000 ($0.30 per Unit)on August 15, 2003, $3,293,000 ($0.10 per Unit) on October 15, 2003 and$3,293,000 ($0.10 per Unit) on December 15, 2003, for a cumulative liquidatingdistribution of $16,466,000 ($0.50 per Unit) for the fiscal year ended December31, 2003.

 

During the period from June 28, 2002 through December 31, 2002, theTrust made a liquidating distribution to the Trust’s Beneficiaries in theaggregate amount of $16,466,000 ($0.50 per Unit).

 

**6.****              TRANSACTIONS WITHRELATED 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, 2004, the balance was paid in full.

 

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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, including litigationconsultant fees, paid to MBV Law for the fiscal year ended December 31, 2004were approximately $617,000.  Legalexpenses paid to MBV Law for the fiscal year ended December 31, 2003 wereapproximately $347,000 and for the period from June 28, 2002 through December31, 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 $373,000 for services rendered for the fiscal year endedDecember 31, 2004, $695,000 for services rendered for the fiscal year endedDecember 31, 2003 and $242,000 for services rendered for the period from June28, 2002 through December 31, 2002.

 

**7.****              OPERATING LEASES**

 

The Trust leased office space under four operating leases; two of theleases expired in 2003 and two of the leases expired in 2004.  The Trust does not anticipate incurring anyexpense for office space for the fiscal year ending December 31, 2005.

 

**8.****              CONTINGENCIES**

 

**Lake Arrowhead Village**

 

In April 2001, a lawsuit was filed in the Superior Court of the Stateof California, County of Orange, by eleven 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 alleged 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, the same eleven tenants who filed theaforementioned lawsuit in Orange County Superior Court, together with eightother tenants at the Company’s former Arrowhead Property, filed a lawsuit inthe Superior 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, LAV, LLC (the companythat purchased the property from the Company in February 2002), the formerowner of the property who had contributed the property to the Company, and manyof the individual and corporate managers and management companies of theproperty during the periods of the tenants’ leases.  LAV, LLC, is an entity in which Scott C.Verges, a co-trustee of the Trust, is a member. (See “Item 13 - Certain Relationships and Related Transactions”).

 

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On March 10, 2003, the lawsuit was removed to the United StatesDistrict Court for the Central District of California, Eastern Division.  However, the tenants/plaintiffs voluntarilydismissed their RICO claim whereupon the lawsuit was sent back to the SanBernardino Superior Court.  By motionpractice which occurred over a period of eight months, six claims from thecomplaint and amendments thereto have been dismissed with prejudice (namely,false statement against realty, intentional interference with prospectivebusiness advantage, negligent interference with business advantage, waste,breach of the implied covenant of fair dealing and impress and forecloseequitable liens).  In between amendmentsof the complaint, one plaintiff (who was also a plaintiff in the earlierlawsuit) dropped out of the lawsuit.  Inaddition, two additional plaintiffs (who were both tenants under one lease)have subsequently dropped out and one plaintiff has been added.  There are currently seventeenplaintiffs.  The plaintiffs’ finalcomplaint alleges, among other claims, breach of contract, fraud, intentionalmisrepresentation and unfair business practices, and it alleges that theCompany overcharged these tenants for CAM. The plaintiffs are seeking an undisclosed amount of monetary damages.

 

With respect to the ten tenants who previously sued the Company andaccepted a compromise judgment in June 2002, the Trustees believe the claimsagainst the Company and the Trust are barred because they were previouslyadjudicated.  The Trustees also believethat all of the claims against the Company and the Trust, by all the plaintiffsin the aforementioned complaint, are without merit and will continue tovigorously defend against them.  The caseis set for trial commencing on September 12, 2005.

 

In conjunction with the above described litigation, on February 4,2003, the Trust, through its broker, Marsh Risk & Insurance Services,tendered the complaint in the Underlying Action to American InternationalSpecialty Lines Insurance Company (“AISLIC”) under the Directors, Officers andCorporate Liability Insurance Policy for Real Estate Investment Trusts, PolicyNo. 473-95-69 (the “Policy”) issued by AISLIC to the Company for the periodfrom December 15, 2000 to December 15, 2002. The Policy provides a $20 million aggregate limit of liability, and a$150,000 retention for judgments, settlements and defense costs fornonsecurities claims.  The Policyrequires AISLIC to advance defense costs of any covered claim prior to itsfinal disposition. On March 25, 2004, AISLIC acknowledged in writing that theCompany, BPP/Arrowhead, L.P., BPP/Arrowhead, Inc., and Burnham PacificOperating Partnership, L.P. are covered under the Policy, as well as certainindividuals who were directors and/or officers of the Company. AISLIC declinedcoverage for the Trust and individuals who were sued in their capacity asTrustees for the Trust.  To date, the Trusthas tendered to AISLIC defense bills totaling $831,794.37 incurred inconnection with the Underlying Action for the period through November 30,2004.  AISLIC has agreed to pay suchdefense costs subject to certain limitations, and to date, has paid $87,384.60.  AISLIC has informed the Trustees that theyare continuing to review and process payments for the defense bills.

 

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**Developers Diversified Realty**

 

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

 

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 alleged breach of contractand related claims arising from the liquidation and property managementservices that DDRRES was to perform. DDRRES’ lawsuit sought monetary damages of approximately $98,000 and ajudicial declaration that DDRRES is entitled to retain construction managementfees obtained from the Company in the amount of approximately $530,000.  The trial court dismissed the lawsuit forlack of jurisdiction in August 2003. DDRRES appealed the trial court’s decision.  In November 2004, the New York appellatecourt issued a unanimous written opinion affirming the trial court’sdecision.  No further appeals areexpected.

 

The Trust, acting through its Trustees, filed a lawsuit on January 13,2003, against DDRRES in the Superior Court of the State of California, Countyof Contra Costa, based on DDRRES’ acts and omissions as the Company’sliquidator and property manager. The lawsuit, which the Trust amended in 2004to add DDRC as an additional defendant, alleges breach of contract, breach offiduciary duty, negligence, unfair business practices and related claims.  The Trust is seeking more than $2.5 millionin damages.  DDRRES and DDRC filed across-complaint in 2004 seeking monetary damages of approximately $98,000 fornon-payment of asset management fees. Trial is scheduled to commence on July11, 2005.

 

**RVIP and Sparks, Inc.**

 

The Trust is also involved in legal proceedings arising from a sale bythe Company of a shopping center in Richmond, California, to Prudential RealEstate Investors, DDRC and Coventry Partners (collectively, “RVIP”) in April2001.  Sparks, Inc. (“Sparks”) is arestaurant tenant at the shopping center. In April 2004, Sparks filed an action in the Superior Court of the Stateof California, County of Contra Costa, against RVIP and the Trust for damagesand specific performance.  Sparks seeksto enforce an option to purchase the restaurant premises.  As to the Trust, Sparks seeks unspecifieddamages for breach of a retail lease and breach of the implied covenant of goodfaith and fair dealing.  In August 2004,the Trust filed a cross-complaint for indemnity against RVIP.  In December 2004, the Trust filed an answerto Sparks’ complaint that denies all of Sparks’ liability and damagesclaims.  The Trust also filed a motionfor summary judgment, which is scheduled for hearing in March 2005.  Trial is scheduled to commence on April 4,2005.

 

28

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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 Trust believes that the outcome of theseother claims and proceedings will not have a material adverse effect on theestimated amount of future cash distributions; however, there can be noassurance in this regard.

 

**9.****              SUBSEQUENT EVENTS**

 

The Trustees of the Trust have determined to make a liquidatingdistribution in the amount of $0.05 per Unit to the registered Beneficiaries ofthe Trust.  The Trustees anticipate thatthis distribution will be paid on or about March 7, 2005.  A letter from the Trustees of the Trust tothe registered Beneficiaries regarding the distribution and related matterswill accompany the payment of the distribution.

 

ITEM 9.          CHANGESIN 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.

 

ITEM 9A.      CONTROLS ANDPROCEDURES.

 

Not applicable.

 

ITEM 9B.       OTHERINFORMATION.

 

None.

 

29

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**PART III**

 

ITEM 10.        DIRECTORSAND 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   |       | 51      |       | Co-Trustee        |       |
| Douglas P. Wilson |       | 54      |       | Co-Trustee        |       |

 

The principaloccupation for the last five years of each of the Trustees, as well as otherrelated information, is set forth below.

 

**TrusteeBiographies**

 

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 Officersince May 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 to hisassociation with MBV Law, Mr. Verges was a principal in the law firm of Cassidy& Verges, which he co-founded in 1990. Mr. Verges received his J.D. in 1980 from Boalt Hall School of Law atthe University of California, Berkeley and is currently an instructor of RealEstate in the MBA program at Mills College, located in Oakland, California.

 

DOUGLAS P.WILSON became a co-trustee of the Trust on June 28, 2002.  Mr. Wilson, founder and CEO of the DouglasWilson Companies, brings nearly 30 years of experience in problem resolution,development, and real estate management to his Companies’ clients.  During his career, Mr. Wilson also hasoverseen the development and management of nearly $3 billion in assets, and hasserved as a Court Appointed Fiduciary for nearly 400 matters in both State andFederal courts.  Prior to founding theDouglas Wilson Companies in 1989, he was the managing general partner of thecompany that developed Symphony Towers, a $160 million, 1.2-million square-footoffice and hotel complex, downtown San Diego’s largest mixed-used project ofits kind.

 

**Section16(a)  Beneficial Ownership ReportingCompliance**

 

Not applicable.

 

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**Code of Ethics**

 

The Trust has not adopted, and does not intend to adopt a code ofethics in accordance with Item 406 of Regulation S-K because the Trust does nothave any executive officers.

 

ITEM 11.        TRUSTEECOMPENSATION.

 

**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:

 

MR. VERGES.  Mr. Verges receivesan hourly rate of $500 for services rendered as co-trustee.  For services rendered for the fiscal yearended December 31, 2004, Mr. Verges was paid approximately $93,000, for thefiscal year ended December 31, 2003, he was paid approximately $241,000 and forthe period from June 28, 2002 through December 31, 2002, he was paidapproximately $161,000.  Mr. Verges alsoreceives reimbursement for reasonable out-of-pocket expenses, which does notinclude administrative 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 receivesreimbursement for reasonable out-of-pocket expenses (which do not includeoccupancy costs and administrative expenses), including additional personnelthat are needed to assist in matters of litigation support, common areamaintenance reconciliations and tenant resolution issues.  For services rendered for the fiscal yearended December 31, 2004, the Douglas Wilson Companies was paid approximately$373,000, which included $128,000 for base services, $219,000 for litigationsupport, including Lake Arrowhead litigation supervision which involved ScottC. Verges and other former officers of the Company, and $26,000 for costsassociated with accounts receivable collections and tenant related issues.  For services rendered  for the fiscal year ended December 31, 2003,the Douglas Wilson Companies was paid approximately $695,000, which included$202,000 for base services, $376,000 for litigation support, including Lake Arrowheadlitigation supervision which involved Scott C. Verges and other former officersof the Company, and $117,000 for costs associated with accounts receivablecollections and tenant related issues. For services rendered for the period from June 28, 2002 through December31, 2002, the Douglas Wilson Companies was paid approximately $242,000, whichincluded $163,000 for base services, $60,000 for litigation support, includingLake Arrowhead litigation supervision which involved Scott C. Verges and otherformer officers of the Company, and $19,000 for costs associated with accountsreceivable collections and tenant related issues.

 

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ITEM 12.        SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED BENEFICIARYMATTERS.

 

**PrincipalBeneficiaries**

 

There is no public market for the Units of the Trust.  On June 27, 2002, the Company formally closedits stock transfer books and its Common Stock was delisted from the New YorkStock Exchange.  On June 28, 2002, theCompany 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.

 

The following table sets forth the beneficial ownership of Units as to(i) each Beneficiary that is known by the Trust to have beneficially owned morethan five percent of the Units as of December 31, 2004; and (ii) each of theTrustees as of March 1, 2005, based on representations of the Trustees andfilings through March 1, 2005 received by the Trust on Schedule 13G under theSecurities Exchange Act of 1934, as amended (the “Exchange Act”). All suchinformation was provided by the persons listed. All percentages have been calculated as of and are based upon 32,928,220Units outstanding at the close of business on such date.  Each person in the table below has indicatedthat it has sole voting and investment power over the Units listed.

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

 

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  *            Less thanone percent

 

(1)          Addressof each Trustee is c/o BPP Liquidating Trust, 450 B Street, Suite 1900, SanDiego, CA  92101

(2)          Informationreported is based upon a Schedule 13G filed with the SEC on February 14, 2003reporting beneficial ownership as of December 31, 2002.

 

As of December 31, 2004, the Trust did not have any compensation plansunder which equity securities are authorized for issuance.

 

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ITEM 13.        CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS.

 

**Relationship with MBV Law**

 

Legal expensespaid to MBV Law, including litigation consultant fees, for the fiscal yearended December 31, 2004 were approximately $617,000.  Legal expenses paid to MBV Law for the fiscalyear ended December 31, 2003 were approximately $347,000 and for the periodfrom June 28, 2002 through December 31, 2002 were approximately $141,000.  Mr. Verges, a co-trustee, is a non-equityemployee of MBV Law and is entitled to devote a certain percentage of his timeto providing services to MBV Law pursuant to the terms of his agreement withthe Trust.  Prior to becoming ChiefExecutive Officer of the Company, Mr. Verges received up to approximately 10%of the gross revenues received by MBV Law from Mr. Verges’ clients, includingthe Company.  Subsequent to Mr. Vergesbecoming Chief Executive Officer of the Company, no portion of his compensationfrom MBV Law has been related to revenues received by MBV Law from the Companyand/or Trust.

 

**Lake Arrowhead Village**

 

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

 

ITEM 14.        PRINCIPALACCOUNTING FEES AND SERVICES.

 

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

 

33

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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 |
|     |   |                                                               |   |
|     |   |                                                               | None. |
|     |   |                                                               |   |
| (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 tothe requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,the registrant has duly caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.

 
|   | BPP Liquidating Trust |
|--------|-----------------------|
|   |                  |
|   |                  |
|   | By:                   | /s/ Scott C. Verges |   |
|   | Scott C. Verges       |
|   | Co-Trustee            |
|   |                  |
|   | Dated:                | March 7, 2005 |   |
|        |                       |  |  |  |  |

 

SIGNATURES

 

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

 
| **Signature**         | ** ** | ** ** | **Title**  | ** ** | **Date**      | ** ** |
|-----------------------|------------|------------|------------|------------|---------------|------------|
|                  |       |       |       |       |          |       |
| /s/ Scott C. Verges   |       |       |       |       |          |
| Scott C. Verges       |       |       | Co-Trustee |       | March 7, 2005 |       |
|                  |       |       |       |       |          |       |
|                  |       |       |       |       |          |       |
| /s/ Douglas P. Wilson |       |       |       |       |          |
| Douglas P. Wilson     |       |       | Co-Trustee |       | March 7, 2005 |       |

 

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