U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
JULY 9, 2001
(Date of Report)
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Commission File No. 0-29164
TRI-NATIONAL DEVELOPMENT CORP.
(Name of Small Business Issuer in its charter)
Wyoming 33-0741573
(State of incorporation) I.R.S. Employer
Identification No.
480 Camino Del Rio S., Suite 140
San Diego, California 92108
(Address of principal executive officers)
(619) 718-6370
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
TERMINATION OF AGREEMENTS
On March 28, 2001, Tri-National Development Corp. (the "Company") entered
into agreements with Senior Care Industries, Inc., a publicly listed Nevada
corporation ("Senior Care"), to sell certain real estate assets of the
Company ("the sale") for a combination of cash, assumed debt and
convertible preferred stock for a total of approximately $70,229,055. The
purchase offer became effective and escrow was opened on April 30, 2001.
Closing was subject to a cash down payment at closing of $10,000,000, of
which $8,000,000 was to be in the form of a payment to Capital Trust, Inc.
of New York in full repayment of Capital Trust's July 1999 loan to the
Company on the Company's Plaza Rosarito property. A contractual
requirement of the sale prior to closing was Capital Trust's approval of
the sale, which approval would have been guaranteed by the full repayment
of the loan.
When Senior Care was unable to make the scheduled $10,000,000 cash down
payment, the Company, at the request of Senior Care, revised the agreements
to replace the cash down payment with the stipulation that Senior Care
negotiate with Capital Trust an agreement acceptable to Capital Trust for
repayment of the loan and provide for all payments under any such
agreement, effectively assuming the obligation and releasing Tri-National
from any liability for its repayment. This agreement was intended to
provide Senior Care with greater flexibility in meeting payment terms
provided it could obtain Capital Trust's agreement to such terms.
The payoff of this loan is the most pressing issue facing the Company. The
sale of assets to Senior Care as described above, which included the sale
of Plaza Rosarito, was expressly subject to the approval of Capital Trust
in order to insure the release of Tri-National's corporate guarantee, the
personal guarantees given by Michael Sunstein and his wife, Dr. Jerry
Parker and his wife, and Lic. Bersain Gutierrrez and his wife, and the
subsequent judgments secured by Capital Trust in the amount of $8,300,000
against each of these parties individually and collectively.
Capital Trust has not accepted any of the offers submitted by Senior Care
and continues to enforce both the corporate and personal guarantees and
judgments. In addition, Capital Trust has requested and been granted a
State of California court appointed receiver. The receiver's sole
responsibility is to secure a mortgage on Plaza Rosarito on behalf of
Capital Trust, which should then replace the corporate and personal
guarantees and subsequent judgments. As detailed in our last Annual
Report, at the time the loan was made to complete this acquisition, no
mortgage was placed on the any of the properties that comprise Plaza
Rosarito - including both the 187,500 square foot shopping center and the
15 acres of beachfront land. This effectively left the property free of
all direct liens and encumbrances, and left Capital Trust's $8,000,000 loan
unsecured by Plaza Rosarito, a state of affairs Capital Trust is now
attempting to reverse.
Unable to negotiate a successful resolution to the payoff of Capital Trust,
Senior Care then petitioned Tri-National to allow 100% of the consideration
payable for the assets in escrow to be made in shares of their Convertible
Preferred stock. After careful consideration and extensive due diligence,
the Board of Directors of the Company has refused to accept these terms and
the risks associated with this last proposal by Senior Care, and has now
terminated the entire transaction effective as of the close of business on
July 2, 2001.
The Company is aggressively pursuing several alternatives for the financing
necessary to complete construction on the shopping center and pay off the
$8,000,000 judgment due to Capital Trust, and believes it is making
excellent progress toward a solution. Although the Company is confident it
will resolve this matter with Capital Trust and retain participation in
these properties, there can be no assurances that it will be successful in
its efforts.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: July 9, 2001
TRI-NATIONAL DEVELOPMENT CORP.
(Registrant)
By: Michael A. Sunstein,
President, Chief Executive Officer
and Chairman of the Board