0001455650-20-000010.txt : 20201019 0001455650-20-000010.hdr.sgml : 20201019 20201019165636 ACCESSION NUMBER: 0001455650-20-000010 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20201013 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20201019 DATE AS OF CHANGE: 20201019 FILER: COMPANY DATA: COMPANY CONFORMED NAME: N1 Liquidating Trust CENTRAL INDEX KEY: 0001455650 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 326497467 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-54671 FILM NUMBER: 201246655 BUSINESS ADDRESS: STREET 1: 515 SOUTH FLOWER STREET, 44TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90071 BUSINESS PHONE: 310-282-8820 MAIL ADDRESS: STREET 1: 515 SOUTH FLOWER STREET, 44TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90071 FORMER COMPANY: FORMER CONFORMED NAME: NorthStar Real Estate Income Trust, Inc. DATE OF NAME CHANGE: 20090206 8-K 1 n1liquidatingtrust8-k10132.htm 8-K Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 13, 2020
N1 Liquidating Trust
(Exact name of registrant as specified in its charter)
Maryland
 
000-54671
 
32-6497467
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
 
515 S. Flower St., 44th Floor, Los Angeles, CA
 
90071
(Address of principal executive offices)
 
(Zip Code)
(310) 282-8820
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
 
 
☐
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
☐
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
☐
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
☐
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.01.    Completion of Acquisition or Disposition of Assets.
On October 13, 2020, N1 Liquidating Trust (the “Trust”), through its subsidiary, N1 Hendon Holdings, LLC (“Holdco”), closed on the discounted payoff of a first mortgage loan with a principal amount of approximately $125.8 million (the “Loan”), in which the Trust held an $85.15 million junior participation interest (the “Junior Participation Interest”) and CFI Hendon Holdings, LLC, an affiliate of the Trust’s external manager (“CFI Holdings”), held a $40.6 million senior participation interest (the “Senior Participation Interest”), for a discounted amount of $33.0 million (the “DPO Amount”). Pursuant to the letter agreement (the “Letter Agreement”), dated as of September 25, 2020, by and between Holdco and CFI Holdings, Holdco received $3.3 million from the DPO Amount received at closing as well as accrued interest on the Junior Participation Interest from the last interest payment date through the closing.
Item 8.01.    Other Events.
The Junior Participation Interest was the Trust’s sole asset. The Trust expects to distribute the proceeds received from the discounted payoff, along with any remaining available cash following settlement of the Trust’s expenses and liabilities and reserves for payment of any remaining costs of the Trust, to the Trust’s unitholders on or around October 31, 2020. The Trust estimates that approximately $0.07 net per unit of beneficial interest will be distributed. This will represent the final disbursement of the unitholders’ interest in the Trust. The Trust expects that its existence will be terminated shortly following this distribution.
Item 9.01.    Financial Statements and Exhibits.
(b) Pro Forma Financial Information
N1 Liquidating Trust and Subsidiary Pro Forma Consolidated Financial Statements
(d) Exhibits.




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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 19, 2020
 
N1 LIQUIDATING TRUST
 
 
By:
/s/ Frank V. Saracino
 
 
 
Frank V. Saracino
 
 
 
Chief Financial Officer


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 EX-99.1 2 n1liquidatingtrust8-kexhib.htm EXHIBIT 99.1 Exhibit

Exhibit 99.1
N1 LIQUIDATING TRUST AND SUBSIDIARY
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS




The following unaudited pro forma consolidated financial statements have been prepared to provide pro forma information with regard to the disposition of the remaining properties held by N1 Liquidating Trust (the “Trust”), as described below, as if the transaction had occurred on December 31, 2019. The unaudited pro forma consolidated financial statements (including the notes thereto) should be read in conjunction with the Trust’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2020.

On October 13, 2020, N1 Liquidating Trust (the “Trust”), through its subsidiary, N1 Hendon Holdings, LLC (“Holdco”), closed on the discounted payoff of a first mortgage loan with a principal amount of approximately $125.8 million (the “Loan”), in which the Trust held an $85.15 million junior participation interest (the “Junior Participation Interest”) and CFI Hendon Holdings, LLC, an affiliate of the Trust’s external manager (“CFI Holdings”), held a $40.6 million senior participation interest (the “Senior Participation Interest”), for a discounted amount of $33.0 million (the “DPO Amount”). Pursuant to the letter agreement (the “Letter Agreement”), dated as of September 25, 2020, by and between Holdco and CFI Holdings, Holdco received $3.3 million from the DPO Amount received at closing as well as accrued interest on the Junior Participation Interest from the last interest payment date through the closing.
The following pro forma consolidated financial statements are unaudited and are subject to a number of estimates, assumptions and other uncertainties, and may not be indicative of the results that actually would have occurred if the transaction had been in effect on the dates indicated.



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N1 LIQUIDATING TRUST AND SUBSIDIARY
PRO FORMA CONSOLIDATED STATEMENTS OF NET ASSETS IN LIQUIDATION
As of December 31, 2019
(Unaudited)



(in thousands)
 
Company Historical(1)
 
Pro Forma Adjustments(2)
 
Company Pro Forma
 
 
Assets
 
 
 
 
 
 
 
Cash
 
$
5,500

 
$
4,658

 
$
10,158

 
Investment in Note Receivable, net
 
28,070

 
(28,070
)
 
—

 
Total assets
 
$
33,570

 
$
(23,412
)
 
$
10,158

 
Liabilities
 
 
 
 
 
 
 
Accounts payable and accrued expenses
 
$
2,912

 
$
(1,883
)
 
$
1,029

 
Accrued liquidation costs
 
40

 
(20
)
 
20

 
Due to related party
 
1,560

 
(1,265
)
 
295

 
Total liabilities
 
$
4,512

 
$
(3,168
)
 
$
1,344

 
Commitments and contingencies
 
 
 
 
 
 
 
Net assets in liquidation
 
$
29,058

 
$
(20,244
)
 
$
8,814

(3) 


See accompanying Notes to Pro Forma Consolidated Financial Statements.



2

N1 LIQUIDATING TRUST AND SUBSIDIARY
PRO FORMA CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION
For the Year Ended December 31, 2019
(Unaudited)




(in thousands)
 
Company Historical(1)
 
Pro Forma Adjustments(2)
 
Company Pro Forma
 
Net assets in liquidation, at beginning of period
 
$
55,435

 


 
$
55,435

 
Change in assets and liabilities:
 
 
 
 
 
 
 
Discounted payoff of notes receivable
 
—

 
(3,300
)
 
(3,300
)
 
Provision for loan losses
 
(27,074
)
 
(23,448
)
 
(50,522
)
 
Cash interest payments applied to carrying value
 
(1,898
)
 
(1,322
)
 
(3,220
)
 
Accrued interest receivable
 
(759
)
 
—

 
(759
)
 
Accounts payable and accrued expenses
 
141

 
1,883

 
2,024

 
Accrued liquidating costs
 
—

 
20

 
20

 
Due to related party
 
2,175

 
1,265

 
3,440

 
Net change in assets and liabilities
 
(27,415
)
 
(24,902
)
 
(52,317
)
 
Change in cash
 
1,038

 
4,658

 
5,696

 
Change in net assets in liquidation
 
(26,377
)
 
(20,244
)
 
(46,621
)
 
Net assets in liquidation, at end of period
 
$
29,058

 
$
(20,244
)
 
$
8,814

(3) 


See accompanying Notes to Pro Forma Consolidated Financial Statements.



3

N1 LIQUIDATING TRUST AND SUBSIDIARY
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The unaudited pro forma consolidated financial statements have been adjusted as discussed in the notes below.
 
(1)        Reflects the Trust’s historical consolidated financial statements as of December 31, 2019. Refer to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 30, 2020.
 
(2)       Adjustments reflect the impact of the discounted payoff of the first mortgage loan in which the Trust held a junior participation. The pro forma cash amount increased to reflect the net proceeds received pursuant to the Letter Agreement. Cash flows from the note receivable since January 1, 2020 are reflected in the pro forma cash amount. The pro forma amounts for accounts payable and accrued expenses and due to related party were adjusted to reflect actual costs incurred since January 1, 2020 and expected remaining costs through liquidation. The liability for estimated liquidation costs are expected to be settled at or around the time of the final distribution to beneficiaries.
 
(3)       Reflects the aggregate amount that the Trust plans to distribute to beneficiaries on or around October 31, 2020. This amount is equal to approximately $0.07 net per unit of beneficial interest.
 



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