Former stockholders of Apollo Commercial Real Estate Finance, Inc. now hold interests in a liquidating trust after the company transferred its remaining assets and liabilities, making future distributions dependent on the trust’s wind-down.
The transfer took effect Nov. 9 under a stockholder-approved liquidation plan, Apollo Commercial Real Estate Finance Liquidating Trust said in an announcement issued Nov. 12. Holders received one trust unit for each ARI share they owned immediately before the transfer.
ARI’s common shares were canceled as part of the transfer. ARI filed a Form 15 with the Securities and Exchange Commission on Nov. 9 to terminate its common stock registration and suspend its periodic reporting obligations.
The Trust must address or reserve for ARI’s remaining obligations before any residual assets or proceeds go to unit holders. The Board of Trustees decides whether to make further distributions and sets their amount and timing. The announcement gave no date for another payment.
Trust units have no exchange listing. Transfers are generally restricted, with limited exceptions that include succession through a will, intestacy or operation of law. These limits leave former stockholders without an exchange market for their units while the board controls whether and when distributions are made.
Stockholders approved the liquidation plan Sept. 29. An ARI filing with the SEC recorded 72,217,727 votes in favor, 799,088 against and 439,400 abstentions.
Before the wind-down, ARI operated as a real estate investment trust focused on commercial property debt, including first-mortgage loans and subordinate financings. In its proxy materials, ARI said the trust structure would help avoid most costs of operating as a public company.
ACREFI Management, LLC manages the Trust’s daily operations under the supervision of its Board of Trustees. The Trust’s stated termination date is Nov. 9, 2029, subject to extensions and earlier termination conditions.
