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: September 18, 2003
RECKSON ASSOCIATES REALTY CORP.
and
RECKSON OPERATING PARTNERSHIP, L.P.
(Exact name of each Registrant as specified in its Charter)
Reckson Associates Realty Corp. - Maryland Reckson Associates Realty Corp. -
Reckson Operating Partnership, L.P. - Delaware 11-3233650
(State or other jurisdiction of incorporation or organization) Reckson Operating Partnership, L.P. -
11-3233647
(IRS Employer ID Number)
225 Broadhollow Road 11747
Melville, New York (Zip Code)
(Address of principal executive offices)
1-13762
(Commission File Number)
(631) 694-6900
(Registrant's telephone number, including area code)
Item 5. Other Events and Required Regulation FD Disclosure
RESTRUCTURING OF RECKSON STRATEGIC VENTURE PARTNERS LLC
In September 2003, Reckson Strategic Venture Partners LLC ("RSVP")
completed the restructuring of its capital structure and management
arrangements. RSVP is a real estate venture capital fund which invests
primarily in real estate and real estate operating companies outside the
Reckson Associates Realty Corp.'s (the "Company") core office and
industrial/R&D focus and whose common equity is held indirectly by FrontLine
Capital Group and with which the Company has made joint venture investments.
Additional information concerning RSVP and the Company's joint venture
investments with, and relationship to, RSVP is detailed in the Company's
filings with the Securities and Exchange Commission, including the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2003.
In connection with the restructuring, RSVP redeemed the interest of
the preferred equity holders of RSVP for an aggregate of approximately $137
million in cash and the transfer to the preferred equity holders of the assets
that comprised RSVP's parking investments valued at approximately $28.5
million. RSVP also restructured its management arrangements whereby a
management company formed by its former managing directors has been retained
to manage RSVP pursuant to a management agreement and the employment contracts
of the managing directors with RSVP have been terminated. In addition, the
managing directors retained a one-third residual interest in RSVP's assets
which is subordinated to the distribution of an aggregate amount of $75
million to RSVP and/or the Company in respect of its joint ventures with RSVP.
The management agreement has a three-year term, subject to early termination
in the event of the disposition of all of the assets of RSVP.
In connection with the restructuring, RSVP and certain of its
affiliates obtained a $60 million secured loan. In connection with this loan,
Reckson Operating Partnership, L.P. ("ROP") agreed to indemnify the lender in
respect of any environmental liabilities incurred with regard to RSVP's
remaining assets in which ROP has a joint venture interest (primarily certain
student housing assets held by RSVP) and guaranteed the
obligation of an affiliate of RSVP to the lender in an amount up to $6 million
plus collection costs for any losses incurred by the lender as a result of
certain acts of malfeasance on the part of RSVP and/or its affiliates. The
loan is scheduled to mature in 2006 and is expected to be repaid from proceeds
of asset sales by RSVP.
SHAREHOLDER LITIGATION CONCERNING PROPOSED SALE OF INDUSTRIAL PORTFOLIO
On or about September 18, 2003, a shareholder derivative action
entitled Robert Lowinger v. Rechler et al. (Index No. 01 4162/03) was filed in
the Supreme Court of the State of New York, County of Nassau, against the
Company's directors and the Company as a nominal defendant challenging the
proposed sale by the Company of the Long Island industrial portfolio. The
fundamental allegation of the complaint is that the process by which the
directors agreed to the transaction was not sufficiently independent of the
Rechler family and did not involve a "market check" or third party auction
process and as a result was not for adequate consideration. Plaintiff seeks a
declaration that the directors violated their fiduciary duties, an injunction
against the transaction or alternatively damages. The Company believes the
complaint is without merit and intends to defend it vigorously.
In addition, on or about September 26, 2003, a derivative action
entitled Judith A. Tucker v. Rechler et al. (Case No. cv 03 4917) was filed in
the United States District Court, Eastern District of New York, against the
Company's directors and the Company, making allegations with respect to the
same transaction and seeking similar relief.
Additional information concerning the proposed sale by the Company of
the Long Island industrial portfolio is contained in the Company's Current
Report on Form 8-K filed with the Securities and Exchange Commission on
September 18, 2003.
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
each registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RECKSON ASSOCIATES REALTY CORP.
By: /s/ Michael Maturo
----------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associates Realty Corp.,
its General Partner
By: /s/ Michael Maturo
---------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
Date: September 30, 2003
4
