- The Washington Times - Monday, May 20, 2002

It was a busy week for Criimi Mae Inc., a Rockville-based commercial real estate trust.
Shares of Criimi Mae, reached their highest level in about nine months last week after reports surfaced that a shareholder group had offered to buy the company at more than a 30 percent premium.
California real estate investors Lyle Weisman and Asher Gottesman, with developer Len Fisch sent a letter May 8 to Criimi Mae Chairman and Chief Executive Officer William Dockser, offering $7 per share for the company, which had been trading at under $4 per share on the New York Stock Exchange. Shares immediately shot up past $5 per share, and after news outlets reported on the offer last week, shares rose to over $6, closing at $6.05 Friday.
Criimi Mae said it would review the offer and other alternatives as part of its duty to maximize shareholder value. The investors, which have a 4.9 percent stake in Criimi Mae, had asked for a response by May 15, but did not receive one.
Meanwhile at the company's annual shareholder meeting Tuesday, shareholders approved a charter amendment allowing the continued use of its net operating losses to reduce future federal income tax liabilities. Criimi Mae's net operating losses totaled about $378 million on March 31, the end of the most recent financial quarter.
"The real and very important effect of the charter amendment was to preserve an important asset the company has, and that is the use of net operating loss," says company spokesman Jim Pastore.
The amendment also put in place a measure that could potentially block any takeover by prohibiting share purchases at 5 percent or higher of the stock's market value.
Mr. Pastore says the ability to block any anti-takeover measure was an unintentional effect of the amendment.
Aaron Grunfeld, the attorney for the three investors, could not be reached for comment.
Also at Tuesday's shareholder meeting, shareholders approved a plan to more than double the number of shares under the company's stock incentive plan. Now more than 1.2 million shares will be available, from 610,000. It was a move Mr. Pastore says was necessary, because the company is actively searching for two more executives.
Criimi Mae also chose not to bring back the embattled accounting firm Arthur Andersen as its official auditor.
On Thursday, Criimi Mae said it would defer the payment of second-quarter dividends on certain series of preferred stock in an effort to get out of debt. It marked the first time the company has deferred dividend payments since it emerged from bankruptcy on April 17, 2001.
"We believe the negative effects of issuing dividends in the form of common stock impede the company's efforts to refinance its secured borrowings," Mr. Dockser said in a statement.
The company's net losses from the first financial quarter ending March 31 increased 13 percent to $6.8 million from $6 million during the like quarter a year ago.


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