SCHEDULE 13D/A: Trinity Place Holdings Announces Strategic Share Sale and JV Restructuring by Key Lender

TPHS Lender LLC, an affiliate of Davidson Kempner Capital Management LP, has agreed to sell its entire stake in Trinity Place Holdings Inc. to Steel IP Investments, LLC, alongside significant restructuring of the Issuer's joint venture interests.

Summary

• TPHS Lender LLC, Davidson Kempner Capital Management LP, and Anthony A. Yoseloff have ceased to be beneficial owners of Trinity Place Holdings Inc. common stock, now holding 0% of the class.
• On February 5, 2025, Trinity Place Holdings Inc. entered into a Stock Purchase Agreement with TPHS Lender and Steel IP Investments, LLC (an affiliate of Steel Partners Holdings L.P.).
• Under the agreement, Steel IP Investments, LLC will purchase 25,862,245 shares of Common Stock from TPHS Lender for an aggregate consideration of $2,586,200.
• The transaction includes several closing conditions, such as TPHS Lender assuming the Issuer's guarantee under a loan for the Paramus, New Jersey property, and the Issuer receiving waivers for legacy fees.
• Key ancillary agreements will be entered into at closing, including a Purchaser Stockholders' Agreement.
• The original Stock Purchase Agreement will be partially terminated, and TPHS Lender's right to receive penny warrants equivalent to 5% of the Common Stock will be terminated and cancelled.
• Registration rights held by certain securityholders of the Issuer will also be terminated and forfeited.
• The JV Operating Agreement will be amended to remove Trinity Place Holdings Inc.'s decision-making and consent rights over the New Jersey Property and the Joint Venture (JV).
• Trinity Place Holdings Inc. will release the JV's obligation for D&O insurance coverage and TPHS Lender's obligation to hold back proceeds from property sales for Issuer's insurance policies.
• Trinity Place Holdings Inc. will provide TPHS Lender an irrevocable right to cause the Issuer to convey its 95% ownership interest in the JV and its distribution rights into a trust for the benefit of the Issuer's shareholders, 90 days after closing.
• The Asset Management Agreement between TPH Asset Manager LLC (an Issuer subsidiary) and the JV Entity will be terminated 45 days after closing, waiving the JV Entity's remaining obligations.
• The closing of the transaction is expected upon satisfaction of all conditions, which are largely satisfied or subject only to the passage of time.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the reporting persons are divesting, the transaction appears to be a structured, agreed-upon strategic move rather than a distressed sale. For Trinity Place Holdings Inc., it represents a significant restructuring that could simplify its operations and potentially benefit shareholders through the JV trust.

Positives

• TPHS Lender receives $2,586,200 for the sale of its shares and associated agreements.
• Trinity Place Holdings Inc. streamlines its corporate structure by divesting its 95% interest in the New Jersey Property JV.
• The potential conveyance of the 95% JV ownership interest into a trust for shareholders could directly benefit existing shareholders of Trinity Place Holdings Inc.
• Termination of penny warrants and certain registration rights simplifies the capital structure and shareholder rights landscape.

Negatives

• TPHS Lender and its affiliates are fully divesting their beneficial ownership in Trinity Place Holdings Inc., indicating a complete exit.
• Trinity Place Holdings Inc. is relinquishing its 95% ownership and decision-making rights in the New Jersey Property JV.

Risks

• The transaction is subject to the satisfaction or waiver of various closing conditions, which, if not met, could prevent the closing.
• Either party may terminate the 2025 Stock Purchase Agreement if the closing does not occur within 30 days, unless the terminating party's breach is the principal cause.

Future Outlook

The transaction is expected to close upon the satisfaction of customary and specific closing conditions, many of which are already satisfied or will be satisfied solely by the passage of time, indicating an imminent completion of the share sale and associated restructuring.

Management Comments

• Anthony A. Yoseloff, Executive Managing Member of Midtown Acquisitions GP LLC (Manager of TPHS Lender LLC), Executive Managing Member of Davidson Kempner Capital Management LP, and Individually, certified the information set forth in the statement as true, complete, and correct to the best of his knowledge and belief.

Industry Context

This transaction represents a strategic divestment by a significant lender/investor (TPHS Lender/Davidson Kempner) from a real estate holding company (Trinity Place Holdings Inc.) and a concurrent acquisition by another strategic investor (Steel Partners Holdings L.P. affiliate). It reflects a shift in ownership and control over specific assets, particularly the New Jersey Property JV, which is common in the real estate and investment sectors as portfolios are optimized or restructured.

Corporate Governance

Related Party Transactions

• The transaction involves Steel IP Investments, LLC, an affiliate of Steel Partners Holdings L.P., purchasing shares from TPHS Lender LLC, which is a reporting person and has had prior agreements with the Issuer (Trinity Place Holdings Inc.).
• The transaction includes the termination of prior agreements and rights (e.g., penny warrants, Asset Management Agreement) between the reporting persons/their affiliates and the Issuer, indicating a restructuring of existing relationships.

Stakeholder Impact

• **Shareholders of Trinity Place Holdings Inc.:** May benefit from the potential conveyance of the 95% JV ownership interest into a trust for their benefit, and a simplified corporate structure.
• **TPHS Lender LLC / Davidson Kempner Capital Management LP:** Fully divests its beneficial ownership in Trinity Place Holdings Inc., concluding its investment in the common stock.
• **Steel IP Investments, LLC / Steel Partners Holdings L.P.:** Acquires a significant stake in Trinity Place Holdings Inc. and gains influence over the New Jersey Property JV.
• **Service Providers of Trinity Place Holdings Inc.:** Affected by the Waiver Condition requiring waivers for legacy fees incurred by the Issuer.

Next Steps

• Closing of the transactions contemplated by the 2025 Stock Purchase Agreement, expected within 30 days of February 5, 2025.
• Entry into certain ancillary agreements, including the Purchaser Stockholders' Agreement, at closing.
• Amendment of the JV Operating Agreement to remove Issuer decision-making and consent rights.
• Termination of the Asset Management Agreement between TPH Asset Manager LLC and the JV Entity 45 days following the Closing Date.
• Potential conveyance of the Issuer's 95% ownership interest in the JV into a trust for shareholders, at any time after 90 days following the Closing Date, at the discretion of TPHS Lender.

Key Dates

Keywords

Trinity Place Holdings Inc., TPHS Lender LLC, Davidson Kempner Capital Management LP, Steel IP Investments LLC, Stock Purchase Agreement, SEC filing, Schedule 13D, beneficial ownership, divestment, joint venture, real estate, corporate restructuring, share sale, warrants, registration rights