Item 8.01 Other Events
As previously disclosed, on May 6, 2020,
Sinatra Properties LLC (the “Purchaser”) filed a complaint (the “Complaint”) in the Superior Court of New
Jersey (the “Court”) against First Real Estate Investment Trust of New Jersey (the “Trust”) and the other
selling parties (collectively with the Trust, the “Sellers”) under the Purchase and Sale Agreement dated January 14,
2020 (as subsequently amended, the “Purchase and Sale Agreement”) by and among the Sellers and the Purchaser. Among
other things, the Complaint alleged breach of contract and breach of the covenant of good faith and fair dealing against the Sellers
in connection with the Sellers’ termination of the Purchase and Sale Agreement on April 30, 2020 due to the occurrence of
a “Purchaser Default” thereunder, based on the Purchaser’s failure to perform its obligations under the Purchase
and Sale Agreement and close the transactions contemplated therein. The Trust disclosed the Purchaser’s filing of the Complaint
in the Trust’s current report on Form 8-K filed with the Securities and Exchange Commission on May 11, 2020, which discloses
additional information about the allegations set forth in the Complaint and the relief sought by the Purchaser.
On June 17, 2020, the Sellers filed their
answer, separate defenses, and counterclaims (the “Answer”) in response to the Complaint, in which, among other things,
the Sellers (a) deny the Purchaser’s claim that the Sellers’ termination of the Purchase and Sale Agreement was wrongful,
and assert that there was no contractual basis in the Purchase and Sale Agreement to relieve the Purchaser from its obligation
to perform thereunder, or to defer or postpone the Purchaser’s obligation to perform, (b) assert certain defenses to the
allegations set forth in the Complaint without admitting any liability, and (c) request relief from the Court in the form of (i)
judgment in the Sellers’ favor dismissing all of the Purchaser’s claims against them with prejudice and denying all
of the Purchaser’s requests for relief, (ii) reasonable attorneys’ fees and costs, and (iii) such other and further
relief as the Court deems just.
In addition, the Answer asserts counterclaims
by the Sellers against the Purchaser for breach of contract due to the Purchaser’s failure to close the Purchase and Sale
Agreement in accordance with its terms, and the Sellers seek a declaratory judgment from the Court that the Sellers properly terminated
the Purchase and Sale Agreement in accordance with its terms due to the Purchaser’s default and an order from the Court that
the Purchaser authorize the escrow agent to release the $15 million deposit under the Purchase and Sale Agreement to the Sellers.
In connection with these counterclaims,
the Answer seeks the following relief from the Court: (a) liquidated damages in the amount of $15 million, as provided in the Purchase
and Sale Agreement; (b) in the alternative to the liquidated damages provided for in the Purchase and Sale Agreement, money damages
in an amount to be determined at trial; (c) interest, attorneys’ fees and costs associated with the defense of the Purchaser’s
claims and the prosecution of the Sellers’ counterclaims against the Purchaser, as provided for in the Purchase and Sale
Agreement; (d) judgment declaring that the Sellers properly terminated the Purchase and Sale Agreement due to the Purchaser’s
default thereunder; (e) judgment declaring that the Purchaser must authorize the escrow agent to release the $15 million deposit
to the Sellers; and (f) such other relief as the Court deems just and equitable.
Forward-Looking and Cautionary Statements
This current report on Form 8-K may contain
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities
laws. These forward-looking statements can be identified by the use of words such as “expect,” “plan,”
“will,” “estimate,” “project,” “intend,” “believe,” “guidance,”
“approximately,” “anticipate,” “may,” “should,” “seek” or the negative
of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do
not relate to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions
of management. These forward-looking statements are subject to known and unknown risks and uncertainties that you should not rely
on as predictions of future events. Forward-looking statements depend on assumptions, data and/or methods which may be incorrect
or imprecise and we may not be able to realize them. The following risks and uncertainties, among others, could cause actual results
to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to: industry
and economic conditions; the Trust’s ability to defend the claims set forth in the Complaint; the Trust’s ability
to assert and prosecute its counterclaims set forth in the Answer; the Trust’s dependence upon its external manager to conduct
its business and achieve its investment objectives; unknown liabilities acquired in connection with acquired properties or interests
in real estate-related entities; general risks affecting the real estate industry and local real estate markets (including, without
limitation, the market value of the Trust’s properties, potential illiquidity of the Trust’s real estate investments,
condemnations, and potential damage from natural disasters); the financial performance of the Trust’s tenants; the impact
of any financial, accounting, legal or regulatory issues or litigation that may affect the Trust and its major tenants; volatility
and uncertainty in the financial markets, including potential fluctuations in the consumer price index; risks associated with
the Trust’s failure to maintain status as a REIT under the Internal Revenue Code of 1986, as amended; and other additional
risks discussed in the Trust’s annual report on Form 10-K for the fiscal year ended October 31, 2019 and other reports filed
with the Securities and Exchange Commission, including risks related to the COVID-19 pandemic. The Trust expressly disclaims any
responsibility to update or revise forward-looking statements, whether as a result of new information, future events or otherwise,
except as required by law.