**SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

 

**FORM 10-K**

 

**ý****  Annual report pursuant to Section 13or 15(d) of the Securities Exchange Act of 1934**

 

**For the fiscal year ended December 31,2003****                                              Commissionfile number 1-9524***

 

**BPP LIQUIDATING TRUST**

(Exact name of Registrant as specified in itsCharter)

 

| **Maryland**                                                    |               | **02-6148466**                    |
|-----------------------------------------------------------------|--------------------|-----------------------------------|
| (State or other jurisdiction of  incorporation or organization) |               | (IRS Employer Identification No.) |
|                                                            |               |                              |
| **450 B Street, Suite 1900, San Diego,  California**            |               | **92101**                         |
| (Address of principal executive offices)                        |               | (Zip Code)                        |
|                                                            |               |                              |
|                                                            | **(619) 641-1141** |                              |
| Registrant’s telephone number, including  area code        |
|                                                                 |                    |                                   |  |  |

 

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

 

Indicate by check mark whether the Registrant: (1) has filed allreports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter periodthat the Registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days.

YES o NO o

 

| Not applicable.  Reference is  made 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.  

 

| Not Applicable. |
|-----------------|

 

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 common  equity held by non-affiliates as of June 30, 2003. |

 

| Not Applicable. |
|-----------------|

 

| The number of units of beneficial interest outstanding as of  March 1, 2004 was 32,928,220. |
|--------------------------------------------------------------------------------------------------|

 

DOCUMENTS INCORPORATED BY REFERENCE

None

|   |
|--------|

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

 

 

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**PARTI**

 

ITEM 1.                             BUSINESS.

 

**Liquidation ofBurnham Pacific Properties, Inc.**

 

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

 

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

 

On June 28, 2002, the Company transferred its remaining assets to(and its 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 Companywas dissolved.  The last day of tradingof the 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 asof the close of business on that date. In addition, on June 28, 2002 the Company filed a Form 15 with theSecurities and Exchange Commission (the “SEC”) to terminate the registration ofthe Company’s common stock under Section 12(b) of the Securities ExchangeAct of 1934, as amended (the “Exchange Act”), and its obligation to fileperiodic reports.  The Company hadpreviously received a “No-Action” letter from the SEC regarding the ExchangeAct reporting obligations of the Trust.

 

During the period of liquidation from December 16, 2000 throughJune 27, 2002, the Company assigned, sold or otherwise disposed of all ofits real estate 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 Companyon the Record Date (each, a “Beneficiary”) automatically became the holder ofone unit of beneficial interest (a “Unit”) in the Trust for each share ofCompany common stock then held of record by such stockholder, and alloutstanding shares of Company common stock were automatically deemedcancelled.  Stockholders of the Companyon the Record Date were not required to take any action to receive theirUnits.  The rights of Beneficiaries intheir Units are not represented by any form of certificate or other instrument.The Trust’s agent maintains a record of the name and address of eachBeneficiary and such Beneficiary’s aggregate Units in the Trust.  Subject to limited exceptions related totransfer by will, intestate succession or operation of law, the Units are nottransferable.

 

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

 

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

 

**Tax Treatment**

 

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

 

**Reports toBeneficiaries; 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 on Form8-K.

 

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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 specifiedin the 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 $0.15 per Unit to the registered Beneficiaries ofthe Trust.  The Trustees anticipate thatthis distribution will be paid on or about March 31, 2004.  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, 2003, the Trust madeliquidating distributions to the Beneficiaries of $0.30 per Unit onAugust 15, 2003, $0.10 per Unit on October 15, 2003 and $0.10 perUnit on December 15, 2003, for a cumulative liquidating distribution of$0.50 per Unit for the fiscal year ended December 31, 2003.  The Trustees estimate that the Trust, inaddition to the March 31, 2004 distribution, will make future aggregatecash distributions of approximately $0.11 per Unit based upon assets currentlyavailable and the collection of receivables, less amounts required to settleliabilities as well as the levels of reserves deemed necessary or appropriatefor 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 period from June 28, 2002 through December 31,2002, the Trust made a liquidating distribution to the Beneficiaries of $0.50 perUnit as reported in the Trust’s Annual Report on Form 10-K for the period fromJune 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.

 

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ITEM 2.                             PROPERTIES.

 

**Retail Properties**

 

The Trust did not own interests in any real estate properties at December 31,2003.

 

**Property Sales afterthe Company’s Dissolution**

 

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

 

***Gateway Center***

 

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

 

### ***Simi Valley Plaza***

 

In late January 2002, House2Home, which occupied 113,932 squarefeet and operated under bankruptcy protection, ceased paying rent at theCompany’s Simi 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$400,000 in consideration for not transferring its interest in the SimiProperty during negotiations relating to the sale of the note (the “Note”) onthe Simi Property.  InSeptember 2003, the Trust was informed that the holder of the Note soldthe Note to an outside third party, and the buyer of the Note subsequently soldthe Simi Property, through auction, 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.

 

**Office Lease**

 

For the fiscal year ended December 31, 2003, the Trust paidapproximately $2,100 per month for office space.  As of March 12, 2004, the Trust pays $500 per month foroffice space and anticipates paying such rent through the fiscal year endingDecember 31, 2004.

 

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ITEM 3.                             LEGAL PROCEEDINGS 

 

**Lake ArrowheadVillage**

 

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

 

On January 17, 2003, 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, the current owner of theproperty (“LAV, LLC”), the former owner of the property who had contributed theproperty to the Company, and many of the individual and corporate managers andmanagement companies of the property during the periods of the tenants’leases.  LAV, LLC, is an entity in whichScott C. Verges, a co-trustee of the Trust, is a member.  (See “Item 13 - Certain Relationships andRelated 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 (falsestatement against realty, intentional interference with prospective businessadvantage, negligent interference with business advantage, waste, breach of theimplied covenant of fair dealing and impress and foreclose equitableliens).  In between amendments of thecomplaint, one plaintiff dropped out of the lawsuit thus leaving a total of 18remaining plaintiffs.  The plaintiffs’final complaint now alleges, among other claims, breach of contract, fraud,intentional misrepresentation and unfair business practices, and it allegesthat the Company overcharged these tenants for CAM.  The plaintiffs are seeking an undisclosed amount of monetarydamages.

 

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Between April and November 2003, the Company conductedextensive written discovery and completed a majority of the depositions of the18 plaintiffs.  Based, in part, on thefacts learned through this process, on February 9, 2004, BPP/ArrowheadL.P., LAV, LLC, Scott C. Verges, Daniel T. Platt and Joseph W. Byrne filed across-complaint against eleven of the plaintiffs, the spouse of one of theplaintiffs, and the lawyer of one of the plaintiffs.  The cross-complaint alleges fraud, negligent misrepresentation,rescission, breach of contract, intentional interference with contract andintentional interference with prospective economic advantage.  Like the plaintiffs, the cross-complainantsare seeking an undisclosed amount of monetary damages.  The cross-defendants’ responses to thecross-complaint are due in early April 2004.

 

With respect to the eleven tenants who previously sued the Company andaccepted a compromise judgment in June 2002, the Trustees believe theclaims against the Company and the Trust are barred because they werepreviously adjudicated.  The Trust,acting through the Trustees, intends to bring a motion for summary judgment toadjudicate this defense in favor of the Company, the Trust, and theirindividual and corporate managers.  Withrespect to the other eight tenants, the Trust believes that the claims arewithout merit and intend to vigorously defend against them.

 

**Gateway Center**

 

In November 2001, Burnham Pacific Operating Partnership, L.P.filed a suit to establish that the Marin City Community Land Corporation(“CLC”), the landlord under the ground lease for the Company’s Gateway Center,breached the lease by refusing to consent to a proposed assignment of the leasein connection with a proposed sale of the property to PO’B Apollo.  The CLC filed a cross-complaint seeking toestablish breaches of the lease by the Operating Partnership.  In May 2002, BPP/Marin, L.P. (“BPP/Marin”)(an indirect subsidiary of the Company that was the owner of the asset) filed asecond legal proceeding seeking to preclude the CLC from declaring any defaultunder the parties’ lease.  The partiesthen stipulated to binding arbitration of all claims in both legalproceedings.  In August 2002, the partiesentered into a settlement arrangement that purported to resolve all claimsbetween BPP/Marin and the CLC pertaining to the Gateway Center lease.  The settlement provided for successiveoptions to acquire the Gateway Center lease, including one in favor of PO’BApollo and a later one in favor of the CLC. Unfortunately, there were disputes over the exercise of the PO’B Apolloand CLC options.

 

On December 10, 2002, BPP/Marininitiated a new arbitration proceeding against the CLC relating to the GatewayCenter.  BPP/Marin sought monetarydamages for the CLC’s interference with a prospective sale of BPP/Marin’sleasehold interest to PO’B Apollo.  InJanuary 2003, the CLC asserted by cross-claim that the CLC-BPP/Marin LandLease pertaining to subordination of the CLC’s reversionary interest in theLease was unenforceable.  OnMarch 26, 2003, the Trust received a final, non-appealable judgment fromthe arbitrator that the subordination clause was enforceable.  On June 30, 2003, the arbitrator ruledthat the CLC was not liable to BPP/Marin for interference with the prospectivePO’B Apollo sale.  On August 26,2003, the arbitrator ruled that there was no prevailing party in thearbitration and denied the requests of both parties for an award of costs andattorneys’ fees.  That arbitration isnow complete.

 

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There is no further litigation pendingbetween the CLC and BPP/Marin.  None isexpected in the future.

 

**DevelopersDiversified**

 

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

 

On January 9, 2003, DDRC filed a lawsuit in the Superior Court ofthe State of California, County of San Diego against the Company and Trustalleging breach of contract and related claims arising from the sale of theHilltop Plaza shopping center in Richmond, California.  DDRC sought damages of approximately$175,000, which consisted mostly of post-closing rent paid by tenants to theCompany and the Trust instead of DDRC. The Trust filed a cross-complaint in February 2003 seeking damagesagainst DDRC in the approximate amount of $25,000 for various accountingerrors.  The lawsuit was resolved inOctober 2003 when DDRC dismissed with prejudice all of its claims againstthe Company and the Trust, in exchange for a dismissal of the Trust’scross-claims against DDRC.

 

On January 10, 2003, DDRRES filed a lawsuit against the Companyand Trust 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.   In August 2003, the trial courtgranted a motion by the Trust to dismiss the lawsuit for lack ofjurisdiction.  DDRRES filed a notice of appealin September 2003, but thereafter did not pursue its appeal.  As a consequence, and pursuant to theTrust’s request, the New York appellate court dismissed DDRRES’ appeal onMarch 10, 2004.  DDRRES has sincerequested the Court reinstate its appeal. DDRRES’ request is currently pending, and the Trust expects to receivethe Court’s decision in April 2004.

 

The Trust, acting through its Trustees, filed a lawsuit onJanuary 13, 2003 against DDRRES in the Superior Court of the State ofCalifornia, County of Contra Costa based on DDRRES’ acts and omissions as theCompany’s liquidator and property manager. The lawsuit, which the Trust amendedin February 2004 to add DDRC as an additional defendant, alleges breach ofcontract, breach of fiduciary duty, negligence, unfair business practices andrelated claims.  The Trust is seekingmore than $2.5 million in damages.  Thelawsuit is currently in the discovery phase. No trial date has yet been set.

 

**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”) betweenDecember 2000 and April 2001.

 

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On December 17, 2002, the Trust filed an action in the SuperiorCourt of the State of California, County of Contra Costa, against RVIP and thePleasant Hill Redevelopment Agency seeking the return of a deposit paid by theCompany in connection with the development of a shopping center in PleasantHill, California.  The deposit at issuewas approximately $73,000, including interest. RVIP contested the lawsuit andclaimed that it should receive the deposit monies. The action settled inSeptember 2003.  Under thesettlement terms, the Trust received a payment of $41,600, and RVIP receivedthe remainder of the deposit.

 

On January 21, 2003, RVIP filed a lawsuit in the Superior Court ofthe State 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 anamended cross-complaint seeking damages of more than $250,000 based on RVIP’sbreach of contract and related claims. The parties reached a confidential settlement inFebruary 2004.  The Trust expectsthe lawsuit will be dismissed in April 2004 upon completion of thesettlement documentation.

 

**Department of Labor**

 

The Trust has been advised that the U.S. Department of Labor hasinvestigated the Company’s decision to suspend trading of shares of Companycommon stock held by employees in the Company’s 401(k) Plan for certain periodsof time following the receipt of an unsolicited proposal from SchottensteinStores Corporation and certain of its affiliates in June 1999 and that theDepartment of Labor believes the Company’s decision was inappropriate.  The Department of Labor has proposedsettlement terms, which the Trustees are analyzing in order to determine anappropriate response.

 

**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.

 

ITEM 4.                             SUBMISSION OF MATTERSTO A VOTE OF BENEFICIARIES.

 

No matters were submitted to a vote of the Beneficiaries during thefiscal year ended December 31, 2003.

 

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**PARTII**

 

ITEM 5.                             MARKET FOR REGISTRANT’SCOMMON EQUITY, RELATED BENEFICIARY MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIES.

 

**Market Information**

 

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

 

**Holders**

 

The Units are not transferable except by will, intestate succession oroperation of law.  As of March 1,2004, the Trust had approximately 1,502 Beneficiaries of record and 32,928,220Units outstanding.

 

**Distributions**

 

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

 

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

 

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ITEM 6.                             SELECTED FINANCIALDATA.

 

The following selected financial data of the Trust are qualified byreference to and should be read in conjunction with the financial statements,related notes thereto, other financial data included elsewhere herein andManagement’s Discussion and Analysis of Financial Condition and Results ofOperations, which is included elsewhere in this Annual Report on Form10-K.  The results are not comparable toany prior period because the Trust began operations as of June 28, 2002.  These historical results are not necessarilyindicative 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, 2003** |   | **June 28,  2002  through**

**December 31,  2002** |   |
|-------------------------------|--------|------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                          |   |                                           |   |                                                          |   |
| Total Revenues                |   | $                                              | 2,188  |                                                          | $      | 2,176 |   |
| Income/(Loss) From Operations |   | $                                              | 26     |                                                          | $      | (372 | ) |
| Income/(Loss) Per Unit        |   | $                                              | 0.0008 |                                                          | $      | (0.01 | ) |
|                          |   |                                           |   |                                                          |   |
| Distributions Paid            |   | $                                              | 16,466 |                                                          | $      | 16,466 |   |
| Distributions Paid Per Unit   |   | $                                              | 0.50   |                                                          | $      | 0.50 |   |

 

 

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

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

 

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

 

**Forward-lookingStatements 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 similarexpressions.  These statements are basedupon our current expectations, estimates and projections, and they are notguarantees of future results.  Theforward-looking statements involve known and unknown risks, uncertainties andother factors which are, in some cases, beyond the control of the Trust andcould materially affect the Trust’s actual results.  Factors that could cause actual results to differ materially fromthose expressed or implied by forward-looking statements include, but are notlimited to, the following risk factors.

 

**Risk-Factors**

 

**The amounts andtiming of distributions may be adversely affected by liabilities andindemnification obligations following asset 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 encounterincreased difficulty in collecting the accounts receivable associated with theproperties that the Company 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.  TheTrust is attempting to collect the remaining accounts receivable associatedwith various 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 ofour assets may result in the 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 onJune 28, 2002, the Trust has been named as a defendant in severallawsuits.  (See Part I – Item 3. –“Legal Proceedings”).  There can be noassurance that the costs related to the defense against and the outcome of anysuch lawsuits will not have a material adverse effect on the amounts and timingof any distributions made to the Trust’s Beneficiaries.

 

**We could incur costsfrom environmental problems even though we did not cause, contribute to or knowabout 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 personal injuries.  There can be no assurance that costs relatedto the environmental condition of our sold properties, or the amount ofproperty or personal injury damages related to such conditions and attributableto the Trust, will not have a material adverse effect on the amounts and timingof any distributions made to the Trust’s Beneficiaries.

 

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**Overview**

 

The following discussion should be read in conjunction with theconsolidated financial statements and notes thereto appearing elsewhere in thisAnnual Report on Form 10-K (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 following describes the results of operations for the fiscal yearended December 31, 2003.  The Trustrecorded net income of $26,000 ($0.0008 per Unit) for the fiscal year endedDecember 31, 2003 as compared to a net loss of $372,000 (-$0.01 per 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.

 

The results for the fiscal year ended December 31, 2003 are notcomparable to any prior period as the Trust began operations as ofJune 28, 2002.

 

13

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**Reserve for EstimatedCosts 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’soperations.  These costs are estimatesand are expected to be incurred over the remaining period of the Trust.

 

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

 

On June 28, 2002, the Reserve balance transferred by the Companyto the Trust was $9,187,000.  During theperiod from June 28, 2002 through December 31, 2002, the Trust madepayments against the Reserve in the amount of $3,041,000 resulting in aDecember 31, 2002 Reserve balance of $6,146,000.

 

**Net Assets inLiquidation**

 

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

 

The valuation of Net Assets in Liquidation is based on estimates as ofDecember 31, 2003, and the actual values realized for assets andsettlement of liabilities may differ materially from the amounts estimated.

 

**Distributions**

 

The Trustees of the Trust have determined to make a liquidatingdistribution in the amount of $0.15 per Unit to the registered Beneficiaries ofthe Trust.  The Trustees anticipate thatthis distribution will be paid on or about March 31, 2004.  A letter from the Trustees of the Trust tothe registered Beneficiaries regarding the distribution and related matterswill accompany the payment of the distribution.

 

14

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During the fiscal year ended December 31, 2003, the Trust madeliquidating distributions to the Beneficiaries of $0.30 per Unit onAugust 15, 2003, $0.10 per Unit on October 15, 2003 and $0.10 perUnit on December 15, 2003, for a cumulative liquidating distribution of$0.50 per Unit for the fiscal year ended December 31, 2003.  The Trustees estimate that the Trust, inaddition to the March 31, 2004 distribution, will make future aggregatecash distributions of approximately $0.11 per Unit based upon assets currentlyavailable and the collection of receivables, less amounts required to settleliabilities as well as the levels of reserves deemed necessary or appropriate forknown 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.

 

**Dispositions**

 

During the fiscal year ended December 31, 2003, the Trust soldGateway Center (formerly known as Marin City) for aggregate proceeds ofapproximately $5.9 million in cash.  OnSeptember 29, 2003, the note on Simi Valley Plaza, the Trust’s soleremaining property, was sold, terminating the Trust’s ownership interest in theproperty (See Part I - Item 2 – “Properties”).

 

# **Liquidity and Capital Resources**

 

During the fiscal year ended December 31, 2003, the Trust’s tworemaining properties were sold.  As ofDecember 31, 2003, the Trust does not own interest in any real estateproperty, and does not intend to acquire any properties or engage in anyoperating activities.  Accordingly, theTrust’s sole sources of liquidity as of December 31, 2003, are its cashreserve of approximately $15.5 million, and approximately $1.2 million inaccounts receivable.

 

The liquidity needs of the Trust in connection with the winding up ofthe Company are potential litigation expenses, trustee expenses, insurancecosts, general and administrative expenses as described under “Results andOperations” and costs associated with cessation of the Trust’s operations.

 

While there can be no assurance that the Trust’s cash reserves will besufficient to satisfy these expenses over the remaining term of the Trust, theTrustees anticipate that the Trust’s net assets are sufficient to meet allanticipated liquidity requirements.

 

ITEM 7A.                   QUANTITATIVE AND QUALITATIVE DISCLOSURESABOUT MARKET RISK. 

 

The Trust does not have any existing debt and does not expect to incurany additional indebtedness. Accordingly, the Trust does not believe that future interest ratefluctuations will have a material effect on the Trust.  The Trust does not utilize financialinstruments for trading or other speculative purposes.

 

15

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ITEM 8.                             FINANCIAL STATEMENTSAND SUPPLEMENTARY DATA.

 

BPP LIQUIDATING TRUST

CONSOLIDATED STATEMENT OF NET ASSETS(LIQUIDATION BASIS)

DECEMBER 31, 2003 and 2002

(unaudited)

(in thousands)

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

 

See the Accompanying Notes

 

16

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BPP LIQUIDATING TRUST

CONSOLIDATED STATEMENT OF CHANGES IN NETASSETS (LIQUIDATION BASIS)

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

(unaudited)

(in thousands, except per Unit amounts)

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

 

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BPP LIQUIDATING TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS(LIQUIDATION BASIS)

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

(unaudited)

(in thousands)

 
|                                                                                                                                                                             |   | **January 1,  2003  through  December  31, 2003** |   | **June 28,  2002  through  December 31,  2002** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|--------|-----------------------------------------------------------|--------|
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                                                                            |   |                                                   |   |                                                      |   |
| Net Income                                                                                                                                                                       |   | $                                                      | 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                                                                                                                                                     |   | 1,688                                                  |   | 1,397                                                     |   |
| Accounts Payable and Other Liabilities                                                                                                                                           |   | (623                                                   | )      | (1,002                                                    | )      |
| Tenant Security Deposits                                                                                                                                                         |   | (2                                                     | )      | (69                                                       | )      |
| Reserves for Estimated Costs During the  Period of Liquidation                                                                                                                   |   | (2,795                                                 | )      | (3,041                                                    | )      |
| Recognition of Deferred Gain                                                                                                                                                     |   | —                                                 |   | (66                                                       | )      |
| Miscellaneous Settlements and Collections                                                                                                                                        |   | 689                                                    |   | —                                                    |   |
| Net Cash Used for Operating Activities                                                                                                                                           |   | (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                                                                                                                                                   |   | (16,466                                                | )      | (16,466                                                   | )      |
| Net Cash Used for Financing Activities                                                                                                                                           |   | (16,266                                                | )      | (16,298                                                   | )      |
|                                                                                                                                                                             |   |                                                   |   |                                                      |   |
| Net Decrease in Cash and Cash Equivalents                                                                                                                                        |   | (11,363                                                | )      | (13,349                                                   | )      |
| Cash and Cash Equivalents at Beginning of  Period                                                                                                                                |   | 26,811                                                 |   | 40,160                                                    |   |
|                                                                                                                                                                             |   |                                                   |   |                                                      |   |
| Cash and Cash Equivalents at End of Period                                                                                                                                       |   | $                                                      | 15,448 |                                                      | $      | 26,811 |   |
|                                                                                                                                                                             |   |                                                   |   |                                                      |   |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW  INFORMATION:                                                                                                                              |   |                                                   |   |                                                      |   |
|                                                                                                                                                                             |   |                                                   |   |                                                      |   |
| Cash Paid for Interest During the fiscal  year ended December 31, 2003 and the period from the period from  June 28, 2002 through December 31, 2002, respectively |   | $                                                      | 737    |                                                      | $      | 591 |   |

 

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**BPPLIQUIDATING TRUST**

**NOTESTO CONSOLIDATED FINANCIAL STATEMENTS**

**December 31,2003**

 

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

 

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

 

The Plan of Liquidation contemplated the orderly sale of all of theCompany’s assets for cash or such other form of consideration as may beconveniently distributed to the Company’s stockholders and the payment of (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(and its 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 Companywas dissolved.  The last day of tradingof the 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 asof the close of business on that date. In addition, on June 28, 2002 the Company filed a Form 15 with theSecurities and Exchange Commission (the “SEC”) to terminate the registration ofthe Company’s common stock under Section 12(b) of the Securities ExchangeAct of 1934, as amended (the “Exchange Act”), and its obligation to file periodicreports.  The Company had previouslyreceived a “No-Action” letter from the SEC regarding the Exchange Act reportingobligations of the Trust.

 

During the period of liquidation from December 16, 2000 throughJune 27, 2002, the Company assigned, sold or otherwise disposed of all ofits real estate assets except its interests in four properties:  Palms to Pines Shopping Center, CentralShopping Center, Simi Valley Plaza and Gateway Center (formerly known as MarinCity).

 

19

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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 Companyon the Record Date (each, a “Beneficiary”) automatically became the holder ofone unit of beneficial interest (a “Unit”) in the Trust for each share ofCompany common stock then held of record by such stockholder, and alloutstanding shares of Company common stock were automatically deemedcancelled.  Stockholders of the Companyon the Record Date were not required to take any action to receive theirUnits.  The rights of Beneficiaries intheir Units are not represented by any form of certificate or other instrument.The Trust’s agent maintains a record of the name and address of eachBeneficiary and such Beneficiary’s aggregate Units in the Trust.  Subject to limited exceptions related totransfer by will, intestate succession or operation of law, the Units are nottransferable, nor does a Beneficiary have authority or power to sell or in anyother manner dispose of any Units.

 

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

 

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

 

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

 

## **Basis of Presentation**

 

The Trust has adopted the liquidation basis of accounting.  Under the liquidation basis of accounting,assets are stated at their estimated net realizable values and liabilities,including the reserve for estimated costs during the period of liquidation, arestated at their anticipated settlement amounts.  The valuations of other assets and liabilities under the liquidationbasis of accounting are based on the Trustees’ estimates as ofDecember 31, 2003.  The actualvalues realized for assets and settlement of liabilities may differ materiallyfrom the amounts estimated.

 

## **Use of Estimates**

 

## **The preparation of financial statements in conformity withaccounting principles generally accepted in the United States of Americarequires the Trustees to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent assetsand 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.**

 

20

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**Assets and Liabilities Transferred to theTrust**

 

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

 

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

 

## **Income Taxes**

 

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

 

**Real Estate and RealEstate Held for Sale**

 

The Trust did not own interests in any real estate properties atDecember 31, 2003.

## ** **

## **Cash and Cash Equivalents**

 

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

 

## **Receivables -Net**

 

## **Receivables are net of an allowance for doubtful accountsof approximately $4,248,000.**

 

## **Financial Instruments**

 

The carrying values reflected in the consolidated statement of netassets at December 31, 2003 reasonably approximate the fair values forcash and cash equivalents, receivables, and accounts payable.

 

21

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**Adjustment toDeferred 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. Upon the sale of Palms to Pines shopping center in August 2002, theentire remaining amount of deferred gain on real estate assets was recognized.

 

**Reserve for EstimatedCosts 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 expectedto be incurred over the remaining Trust period.

 

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

 

## **Recent Accounting Pronouncements**

## ** **

## **Not Applicable.**

 

## **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.

 

22

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

 

Net income/(loss) per Unit is calculated using the weighted-averagenumber of Units outstanding at December 31, 2003 and December 31,2002, respectively.  The following tableshows the net income/(loss) per Unit computation for the fiscal year endedDecember 31, 2003 and for the period from June 28, 2002 throughDecember 31, 2002 (in thousands except per Unit amount).

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

 

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

 

The Trust did not own interests in any real estate properties atDecember 31, 2003.

 

**4.****              SALESOF REAL ESTATE**

 

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

 

**Gateway Center**

 

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

 

### ***Simi Valley Plaza***

 

In late January 2002, House2Home, which occupied 113,932 squarefeet and operated under bankruptcy protection, ceased paying rent at theCompany’s Simi 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 a Receiver,BPP/Simi Valley, L.P., a “Bankruptcy Remote Entity,” which was an indirectsubsidiary of the Trust, continued to hold fee title to the Simi Property.

 

23

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In August 2003, the Trust negotiated and received a payment of$400,000 in consideration for not transferring its interest in the SimiProperty during negotiations relating to the sale of the note (the “Note”) onthe Simi Property.  InSeptember 2003, the Trust was informed that the holder of the Note soldthe Note to an outside third party, and the buyer of the Note subsequently soldthe Simi Property, through auction, 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, 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, 2003and $3,293,000 ($0.10 per Unit) on December 15, 2003, for a cumulativeliquidating distribution of $16,466,000 ($0.50 per Unit) for the fiscal yearended December 31, 2003.

 

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

 

**6.****              TRANSACTIONSWITH RELATED PARTIES**

 

In February 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.  Under the Purchase and Sale Agreement, Scott C. Verges agreed torepay the Company $877,000 for construction and other credits in 30 equalnon-interest bearing monthly installments. As of December 31, 2003, the unpaid remaining balance wasapproximately $263,000.

 

The Trust has engaged MBV Law, formerly known as Mandel Buder &Verges, for legal services.  Scott C.Verges, a co-trustee, is a non-equity employee of MBV Law.  Legal expenses paid to MBV Law for thefiscal year ended December 31, 2003 were approximately $347,000 and forthe period from June 28, 2002 through December 31, 2002, wereapproximately $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 $695,000 for services rendered for the fiscal year endedDecember 31, 2003 and $242,000 for services rendered for the period fromJune 28, 2002 through December 31, 2002.

 

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**7.****              OPERATINGLEASES**

 

The Trust leased office space under four operating leases; two of theleases expired in 2003 and one of the leases expired in March 2004.  As of March 12, 2004, the Trust pays$500 per month for office space and anticipates paying such rent through thefiscal year ending December 31, 2004.

 

**8.****              CONTINGENCIES**

 

**Lake ArrowheadVillage**

 

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

 

On January 17, 2003, 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, the current owner of theproperty (“LAV, LLC”), the former owner of the property who had contributed theproperty to the Company, and many of the individual and corporate managers andmanagement companies of the property during the periods of the tenants’ leases.  LAV, LLC, is an entity in 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 (falsestatement against realty, intentional interference with prospective businessadvantage, negligent interference with business advantage, waste, breach of theimplied covenant of fair dealing and impress and foreclose equitableliens).  In between amendments of thecomplaint, one plaintiff dropped out of the lawsuit thus leaving a total of 18remaining plaintiffs.  The plaintiffs’final complaint now alleges, among other claims, breach of contract, fraud,intentional misrepresentation and unfair business practices, and it allegesthat the Company overcharged these tenants for CAM.  The plaintiffs are seeking an undisclosed amount of monetarydamages.

 

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Between April and November 2003, the Company conductedextensive written discovery and completed a majority of the depositions of the18 plaintiffs.  Based, in part, on thefacts learned through this process, on February 9, 2004, BPP/ArrowheadL.P., LAV, LLC, Scott C. Verges, Daniel T. Platt and Joseph W. Byrne filed across-complaint against eleven of the plaintiffs, the spouse of one of theplaintiffs, and the lawyer of one of the plaintiffs.  The cross-complaint alleges fraud, negligent misrepresentation,rescission, breach of contract, intentional interference with contract andintentional interference with prospective economic advantage.  Like the plaintiffs, the cross-complainantsare seeking an undisclosed amount of monetary damages.  The cross-defendants’ responses to thecross-complaint are due in early April 2004.

 

With respect to the eleven tenants who previously sued the Company andaccepted a compromise judgment in June 2002, the Trustees believe theclaims against the Company and the Trust are barred because they werepreviously adjudicated.  The Trust,acting through the Trustees, intends to bring a motion for summary judgment toadjudicate this defense in favor of the Company, the Trust, and their individualand corporate managers.  With respect tothe other eight tenants, the Trust believes that the claims are without meritand intend to vigorously defend against them.

 

**Gateway Center**

 

In November 2001, Burnham Pacific Operating Partnership, L.P.filed a suit to establish that the Marin City Community Land Corporation(“CLC”), the landlord under the ground lease for the Company’s Gateway Center,breached the lease by refusing to consent to a proposed assignment of the leasein connection with a proposed sale of the property to PO’B Apollo.  The CLC filed a cross-complaint seeking toestablish breaches of the lease by the Operating Partnership.  In May 2002, BPP/Marin, L.P. (“BPP/Marin”)(an indirect subsidiary of the Company that was the owner of the asset) filed asecond legal proceeding seeking to preclude the CLC from declaring any defaultunder the parties’ lease.  The partiesthen stipulated to binding arbitration of all claims in both legalproceedings.  In August 2002, theparties entered into a settlement arrangement that purported to resolve allclaims between BPP/Marin and the CLC pertaining to the Gateway Centerlease.  The settlement provided forsuccessive options to acquire the Gateway Center lease, including one in favorof PO’B Apollo and a later one in favor of the CLC.  Unfortunately, there were disputes over the exercise of the PO’BApollo and CLC options.

 

On December 10, 2002, BPP/Marininitiated a new arbitration proceeding against the CLC relating to the GatewayCenter.  BPP/Marin sought monetarydamages for the CLC’s interference with a prospective sale of BPP/Marin’sleasehold interest to PO’B Apollo.  InJanuary 2003, the CLC asserted by cross-claim that the CLC-BPP/Marin LandLease pertaining to subordination of the CLC’s reversionary interest in theLease was unenforceable.  OnMarch 26, 2003, the Trust received a final, non-appealable judgment fromthe arbitrator that the subordination clause was enforceable.  On June 30, 2003, the arbitrator ruledthat the CLC was not liable to BPP/Marin for interference with the prospectivePO’B Apollo sale.  On August 26,2003, the arbitrator ruled that there was no prevailing party in thearbitration and denied the requests of both parties for an award of costs andattorneys’ fees.  That arbitration isnow complete.

 

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There is no further litigation pendingbetween the CLC and BPP/Marin.  None isexpected in the future.

 

**DevelopersDiversified**

 

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

 

On January 9, 2003, DDRC filed a lawsuit in the Superior Court ofthe State of California, County of San Diego against the Company and Trustalleging breach of contract and related claims arising from the sale of theHilltop Plaza shopping center in Richmond, California.  DDRC sought damages of approximately$175,000, which consisted mostly of post-closing rent paid by tenants to theCompany and the Trust instead of DDRC. The Trust filed a cross-complaint in February 2003 seeking damagesagainst DDRC in the approximate amount of $25,000 for various accountingerrors.  The lawsuit was resolved inOctober 2003 when DDRC dismissed with prejudice all of its claims againstthe Company and the Trust, in exchange for a dismissal of the Trust’scross-claims against DDRC.

 

On January 10, 2003, DDRRES filed a lawsuit against the Companyand Trust 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.   In August 2003, the trial courtgranted a motion by the Trust to dismiss the lawsuit for lack ofjurisdiction.  DDRRES filed a notice ofappeal in September 2003, but thereafter did not pursue its appeal.  As a consequence, and pursuant to theTrust’s request, the New York appellate court dismissed DDRRES’ appeal onMarch 10, 2004.  DDRRES has sincerequested the Court reinstate its appeal. DDRRES’ request is currently pending, and the Trust expects to receivethe Court’s decision in April 2004.

 

The Trust, acting through its Trustees, filed a lawsuit onJanuary 13, 2003 against DDRRES in the Superior Court of the State ofCalifornia, County of Contra Costa based on DDRRES’ acts and omissions as theCompany’s liquidator and property manager. The lawsuit, which the Trust amendedin February 2004 to add DDRC as an additional defendant, alleges breach ofcontract, breach of fiduciary duty, negligence, unfair business practices andrelated claims.  The Trust is seekingmore than $2.5 million in damages.  Thelawsuit is currently in the discovery phase. No trial date has yet been set.

 

**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”) betweenDecember 2000 and April 2001.

 

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On December 17, 2002, the Trust filed an action in the SuperiorCourt of the State of California, County of Contra Costa, against RVIP and thePleasant Hill Redevelopment Agency seeking the return of a deposit paid by theCompany in connection with the development of a shopping center in PleasantHill, California.  The deposit at issuewas approximately $73,000, including interest. RVIP contested the lawsuit andclaimed that it should receive the deposit monies. The action settled inSeptember 2003.  Under thesettlement terms, the Trust received a payment of $41,600, and RVIP receivedthe remainder of the deposit.

 

On January 21, 2003, RVIP filed a lawsuit in the Superior Court ofthe State 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 anamended cross-complaint seeking damages of more than $250,000 based on RVIP’sbreach of contract and related claims. The parties reached a confidential settlement inFebruary 2004.  The Trust expectsthe lawsuit will be dismissed in April 2004 upon completion of thesettlement documentation.

 

**Department of Labor**

 

The Trust has been advised that the U.S. Department of Labor hasinvestigated the Company’s decision to suspend trading of shares of Companycommon stock held by employees in the Company’s 401(k) Plan for certain periodsof time following the receipt of an unsolicited proposal from SchottensteinStores Corporation and certain of its affiliates in June 1999 and that theDepartment of Labor believes the Company’s decision was inappropriate.  The Department of Labor has proposedsettlement terms, which the Trustees are analyzing in order to determine anappropriate response.

 

**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 reserves establishedby the Trust, the estimated amount of future cash distributions could bematerially 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.

 

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**9.****              SUBSEQUENTEVENTS**

 

The Trustees of the Trust have determined to make a liquidatingdistribution in the amount of $0.15 per Unit to the registered Beneficiaries ofthe Trust.  The Trustees anticipate thatthis distribution will be paid on or about March 31, 2004.  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.                             CHANGES IN ANDDISAGREEMENTS 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.

 

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**PARTIII**

 

ITEM 10.                       DIRECTORSAND EXECUTIVE OFFICERS OF THE REGISTRANT.

 

**Information Regardingthe 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   |   | 50      |   | Co-Trustee        |   |
| Douglas P. Wilson |   | 53      |   | Co-Trustee        |   |

 

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

 

**Trustee Biographies**

 

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

 

DOUGLAS P. WILSON became a co-trustee of the Trust on June 28,2002.  Mr. Wilson, founder and CEO ofthe Douglas Wilson Companies, brings 25 years of experience in problemresolution, development, and real estate management to his Companies’clients.  During his career, Mr. Wilsonalso has overseen the development and management of nearly $3 billion inassets, including serving as receiver 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.

 

**Section 16(a)  Beneficial Ownership Reporting Compliance**

 

Not applicable.

 

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**Code of Ethics**

 

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

 

ITEM 11.                       TRUSTEECOMPENSATION.

 

**Trustees**

 

Pursuant to Section 9.1 of the Liquidating Trust Agreement, inlieu of commissions or other compensation fixed by law for trustees, theco-trustees are 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, 2003, Mr. Verges was paid approximately $241,000 andfor the period from June 28, 2002 through December 31, 2002, he waspaid approximately $161,000.  Mr. Vergesalso receives reimbursement for reasonable out-of-pocket expenses, which doesnot include 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, 2003, the Douglas Wilson Companies was paidapproximately $695,000, which included $202,000 for base services, $376,000 forlitigation support, including Lake Arrowhead litigation supervision whichinvolved Scott C. Verges and other former officers of the Company, and $117,000for costs associated with accounts receivable collections and tenant relatedissues.  For services rendered for theperiod from June 28, 2002 through December 31, 2002, the DouglasWilson Companies was paid approximately $242,000, which included  $163,000 for base services, $60,000 forlitigation support, including Lake Arrowhead litigation supervision whichinvolved Scott C. Verges and other former officers of the Company, and $19,000for costs associated with accounts receivable collections and tenant relatedissues.

 

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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 formallyclosed its stock transfer books and its Common Stock was delisted from the NewYork Stock Exchange.  On June 28,2002, the Company filed a Form 15 with the SEC to terminate the registration ofits Common Stock under the Exchange Act and its obligation to file periodicreports with respect thereto.  The Unitsare not transferable 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 ownedmore than five percent of the Units as of December 31, 2003; and(ii) each of the Trustees as of March 1, 2004, based onrepresentations of the Trustees and filings through February 9, 2004received by the Trust on Schedule 13G under the Securities Exchange Act of1934, as amended (the “Exchange Act”). All such information was provided by thepersons listed.  All percentages havebeen calculated as of March 1, 2004 and are based upon 32,928,220 Unitsoutstanding at the close of business on such date.  Each person in the table below has indicated that it has solevoting 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            |   | 11.5                      |   |
| 1391 Main St.                             |   |                 |   |                      |   |
| Springfield, MA  01103               |   |                 |   |                      |   |
|                                      |   |                 |   |                      |   |
| Deutsche Bank AG                          |   | 2,753,466            | (2)    | 8.4                       |   |
| Taunusanlage 12, D-60325                  |   |                 |   |                      |   |
| Frankfurt am Main                         |   |                 |   |                      |   |
| Federal Republic of Germany               |   |                 |   |                      |   |

 

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| *      |   | Less than one percent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (1)    |   | Address of each Trustee is c/o BPP Liquidating Trust, 450 B Street,  Suite 1900, San Diego, CA  92101                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (2)    |   | Information reported is based upon a Schedule 13G filed with the  SEC on February 9, 2004 reporting beneficial ownership as of  December 31, 2003. The Schedule 13G reports Units beneficially  owned by the Corporate and Investment Banking business group and the  Corporate Investments business group of Deutsche Bank AG and its subsidiaries  and affiliates (collectively, “DBAG”), but does not reflect Units, if any,  beneficially owned by any other business group of DBAG.  The information reported includes  2,759,500 Units beneficially owned by DB Advisors, L.L.C., 23,600 Units  beneficially owned by Deutsche Bank Securities Inc. and 2,759,866 Units  beneficially owned by Deutsche Bank AG, London Branch.) |

 

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As of December 31, 2003, the Trust did not have any compensationplans under which equity securities are authorized for issuance.

 

ITEM 13.                       CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS.

 

**Relationship with MBVLaw**

 

Legal expenses paid to MBV Law for the fiscal year endedDecember 31, 2003 were approximately $347,000 and for the period fromJune 28, 2002 through December 31, 2002 were approximately$141,000.  Mr. Verges, a co-trustee, isa non-equity employee of MBV Law and is entitled to devote a certain percentageof his time to providing services to MBV Law pursuant to the terms of his agreementwith the 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 ArrowheadVillage**

 

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 ofNovember 26, 2001, as subsequently amended on February 12, 2002, (1)LAV, LLC agreed to assume all of the outstanding mortgage indebtedness securedby the asset in satisfaction of the payment of the purchase price, (2) theCompany agreed to advance $2 million (the “Construction Credit”) into an escrowaccount to be controlled by the mortgage lender from which LAV, LLC drew theentire amount which was necessary to fund the costs of significant structuralrepairs to the center’s seawall and parking garage, and (3) Scott C. Vergesagreed to repay a $500,000 portion of the Construction Credit advance and$377,000 of certain other credits in 30 equal non interest-bearing monthlyinstallments.  As of March 1, 2004,the remaining unpaid balance was approximately $175,000.  The $19.1 million of outstanding mortgageindebtedness assumed by LAV, LLC bears interest at an annual rate of 9.20%,matures in 2011 and cannot be prepaid until 2011.  Mr. Verges also separately agreed to forfeit all severancebenefits, which would have cost the Company an aggregate of approximately $2.4million, which he otherwise would have been entitled to receive no later thanJanuary 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.

 

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**PARTIV**

 

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

 

(a)                                                          FINANCIALSTATEMENT SCHEDULES

 

(b)                                                         REPORTSON FORM 8-K

 

On August 1, 2003, the Trust filed a Form 8-K filed, announcingunder Item 5 that:

 

(i)                       on July 31, 2003, the Trustclosed on the sale of Gateway Center, located in Marin City, California, forgross cash proceeds of approximately $20,750,000; and

 

(ii)                    the Trustees of the Trust haddetermined to make a liquidating distribution in the amount of $0.30 per Unitto the registered Beneficiaries of the Trust payable on or aboutAugust 15, 2003.

 

On October 7, 2003, the Trust filed a Form 8-K, announcing underItem 5 that:

 

(i)                       on September 29, 2003, SimiValley Plaza was sold, terminating the Trust’s ownership interest in theproperty; and

 

(ii)                    the Trustees of the Trust haddetermined to make a liquidating distribution in the amount of $0.10 per Unitto the registered Beneficiaries of the Trust payable on or aboutOctober 15, 2003.

 

On December 15, 2003, the Trust filed a Form 8-K, announcing underItem 5 that the Trustees of the Trust had determined to make a liquidatingdistribution in the amount of $0.10 per Unit to the registered Beneficiaries ofthe Trust payable on or about December 15, 2003.

 

(c)                                                          EXHIBITS

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

 

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of theSecurities Exchange Act of 1934, the registrant has duly caused this report tobe signed on its behalf by the undersigned, thereunto duly authorized.

 
|   | BPP Liquidating Trust |
|--------|-----------------------|
|   |                  |
|   | By:                   |  /s/ Scott C. Verges |   |
|   | Scott C. Verges       |
|   | Co-Trustee            |
|   |                  |
|   | Dated:                | March 30, 2004 |   |
|        |                       |  |  |  |  |

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934,this report has been signed below by the following persons on behalf of theRegistrant and in the capacities and on the dates indicated.

 
| **Signature**       |   | **Title**  |   | **Date**            |
|---------------------|--------|------------|--------|---------------------|
|                |   |       |   |                |
| /s/ Scott C. Verges |   |       |   |                |
| Scott C. Verges     |   | Co-Trustee |   | March 30, 2004 |
|                |   |       |   |                |
|                |   |       |   |                |
| /s/ Douglas Wilson  |   |       |   |                |
| Douglas P. Wilson   |   | Co-Trustee |   | March 30, 2004 |

 

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