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SEC Filings

PREM14A
FOREST CITY REALTY TRUST, INC. filed this Form PREM14A on 09/21/2018
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federal income tax treatment of the special REIT taxable income distribution, if any, is not free from doubt, and the Internal Revenue Service (the “IRS”) or a court may disagree with this treatment by the Company.

With respect to the per share merger consideration received in exchange for the shares of our common stock pursuant to the merger, U.S. stockholders will generally recognize gain or loss in an amount equal to the difference, if any, between the amount of cash received with respect to their shares of our common stock pursuant to the merger and their adjusted tax basis in such shares. Subject to the exceptions discussed in “The Merger—Material U.S. Federal Income Tax Consequences—Treatment of the Per Share Merger Consideration—Non-U.S. Stockholders,” beginning on page [●], non-U.S. stockholders generally should not be subject to U.S. federal income tax on the gain or loss recognized on cash received with respect to their shares of our common stock pursuant to the merger.

Holders of shares of our common stock should read “The Merger—Material U.S. Federal Income Tax Consequences” beginning on page [●] for a more detailed discussion of the U.S. federal income tax consequences of the receipt of the special REIT taxable distribution and the per share merger consideration in exchange for the shares of our common stock pursuant to the merger. Such holders should also consult their tax advisors for a complete analysis of the effect of the merger on their federal, state and local and/or foreign taxes.

Delisting and Deregistration of Forest City’s Common Stock (page [])

If the merger is completed, all of Forest City’s common stock will be owned by Parent. Accordingly, common stock will no longer be traded on the NYSE, and will be deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Merger Support Agreements (page [])

In connection with the execution of the merger agreement, on July 30, 2018, the Brookfield Parties entered into a merger support agreement with each of Starboard Value LP (“Starboard”) and certain of its affiliates (collectively, the “Starboard parties”) and Scopia Capital Management LP (“Scopia”) and certain of its affiliates (collectively, the “Scopia parties” and each merger support agreement, a “merger support agreement”). As of September 12, 2018, the Starboard parties beneficially owned approximately 5.63% of the outstanding shares of common stock, and the Scopia parties beneficially owned approximately 8.15% of the outstanding shares of common stock.

The respective merger support agreement to which the Starboard parties and the Scopia parties are party generally requires, among other things, the Starboard parties and the Scopia parties, respectively, to vote or cause to be voted all of the shares of common stock beneficially owned by them in favor of the Merger Proposal and any proposal to adjourn the special meeting in order for us to solicit additional proxies in favor of the Merger Proposal, and against any alternative acquisition proposal and any action that could reasonably be expected to impede, interfere with, delay, postpone, discourage, frustrate the purposes of or adversely affect the consummation of the merger or the performance by us of our obligations under the merger agreement. In addition, under the respective merger support agreement to which they are party, the Starboard parties and the Scopia parties have agreed not to transfer any shares of common stock they beneficially own or may acquire until the earlier of the termination of their respective merger support agreement in accordance with its terms and the initial filing of the first definitive proxy statement in respect of a Company stockholder meeting in respect of the merger. Each of the Starboard parties and the Scopia parties have further agreed under their respective merger support agreement not to solicit any inquiry, discussion, request, offer or proposal that constitutes, or would reasonably be expected to lead to, an acquisition proposal.



 

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