G reit liquidating trust k 1
“Because we’re seeing strong capital markets interest at the portfolio, sub-portfolio, and individual asset level for our remaining high-quality assets, we believe the time is right to recommend a plan of liquidation for the Company in an effort to bring liquidity and maximize value to our shareholders,” said Sherri Schugart, President and Chief Executive Officer of Hines Global REIT.
The Hines Global REIT portfolio currently consists of 33 assets --representing 13.9 million square feet that is 90% leased, of which, approximately 61% is located throughout the United States and 39% is located internationally.
The Plan is subject to the approval of the Company’s shareholders at the Company’s annual shareholder meeting scheduled on July 17, 2018.
The Company filed a preliminary proxy statement with the Securities and Exchange Commission (“SEC”) describing the proposed Plan on April 25, 2018, and will submit it to the shareholders of the Company for their consideration along with the Company’s definitive proxy statement following its filing with the SEC.
897(h)(1) should not apply to liquidating distributions from DCRs to non-U. 897(h)(1), and that such section only applies to non-liquidating distributions, and not to liquidating distributions. 897(h)(1) did not apply to distributions in complete liquidation of a DCR to such non-U. taxpayer and (ii) issue regulations to clarify that the term “distribution” under Code Sec.
897(h)(2) specifically excepts from this rule the sale of stock in a DCR. The use of the term “amount realized” would suggest that a non-U. shareholder that has its shares liquidated is treated as having made a sale of such shares to the distributing corporation in line with principles under Subchapter C of the Code. 1445(e)(6), dealing with distributions from REITs, authorizes a REIT to withhold on the portion of a distribution treated as gain from the sale of a USRPI under Code Sec.
As previously noted, a liquidating distribution is deemed to be a sale of stock in the liquidating corporation by the shareholder under Subchapter C of the Code. 897(h)(1) also indicates an intent to exclude liquidating distributions from a DCR from the term “distribution” under Code Sec. Specifically, Code section 897(d)(1) contains the qualifier “including a distribution in liquidation or redemption” after the word “distribution.” However, no such qualifying language exists under Code Sec. If Congress intended to include liquidating distributions in Code Sec.
The Company expects to continue making regular distributions as it seeks shareholder approval of the Plan and also intends to make multiple liquidating distributions pursuant to the Plan.
Hines Global REIT raised .1B in equity through April 2018.
Therefore, the use of “net capital gain” in the Congressional Report would suggest that Congress did not intend for Code Sec. The accompanying 2003 Senate Report to the amendment to Code Sec. 897(h)(1) was not intended to apply to liquidating distributions from DCRs. 897(h)(1), a distribution by a qualified investment entity with respect to any publicly traded class of stock is not treated as gain recognized from the sale or exchange of a USRPI if the non-U. shareholder owned 5% or less of such class of stock during the one-year period ending on the date of such distribution (the “5% Exception”).