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UNITED STATES
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 (Date of earliest event reported):
November 6, 2026
| ELME
COMMUNITIES |
| (Exact
name of registrant as specified in its charter) |
| Maryland |
001-06622 |
53-0261100 |
| (State
of incorporation) |
(Commission
File Number) |
(IRS
Employer Identification Number) |
7550
WISCONSIN AVE, SUITE 900,
BETHESDA,
MD 20814
(Address of principal executive offices) (Zip
code)
Registrant’s telephone number, including
area code: (202) 774-3200
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act: None.
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2
of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01. Entry into a Material Definitive Agreement.
At the close of business (Eastern Time) on November 5, 2026, the share
transfer books of Elme Communities (the “Company”) were closed. On November 6, 2026 (the “Effective Date”), prior
to the Effective Time (as defined below), in accordance with the Plan of Sale and Liquidation approved by the Board of Trustees of the
Company (the “Board”) on July 30, 2025 and by the shareholders of the Company on October 30, 2025 (the “Plan of Sale
and Liquidation”), the Company will transfer its remaining assets and liabilities to Elme Communities Liquidating Trust, a newly-created
Maryland common law trust (the “Liquidating Trust”), for the benefit of the common shareholders of the Company. The Company
has filed a Notice of Termination of Existence with the Maryland Department of Assessments & Taxation (“SDAT”), and pursuant
to such notice, which has been accepted by SDAT, the Company will be dissolved as of 11:59 a.m. on the Effective Date (the “Effective
Time”).
As of the Effective Time, all of the beneficial interests of the Liquidating
Trust (the “Beneficial Interests”) will be held by the shareholders of the Company, with each shareholder of the Company being
deemed automatically to have received a percentage of Beneficial Interests in the Liquidating Trust corresponding to such shareholder’s
percentage ownership in the Company as of the close of business on November 5, 2026. Also at the Effective Time, all outstanding common
shares of beneficial interest, par value $0.01 per share (the “Common Shares”), of the Company will be cancelled. Subject
to certain exceptions related to transfer by will, intestate succession or operation of law, Beneficial Interests in the Liquidating Trust
are not transferable, and holders of Beneficial Interests do not have authority or power to sell or in any other manner dispose of their
Beneficial Interests. The Beneficial Interests will not trade on the New York Stock Exchange or any other exchange or over-the-counter.
The rights of holders of Beneficial Interests will not be represented by any form of certificate or other instrument. The Company will
file a Form 15 with the Securities and Exchange Commission (the “SEC”) on the Effective Date to terminate the registration
of its Common Shares under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
In accordance with the Plan of Sale and Liquidation, the Liquidating
Trust was created pursuant to a Liquidating Trust Agreement, dated as of October 7, 2026 (the “Trust Agreement”). Under the
Trust Agreement, Paul T. McDermott, the President and Chief Executive Officer of the Company, and W. Drew Hammond, the Executive Vice
President, Chief Financial Officer, Chief Administrative Officer, Secretary and Treasurer of the Company, were appointed as the initial
trustees of the Liquidating Trust. Upon the transfer of assets and liabilities to the Liquidating Trust on the Effective Date, Mark E.
Chertok, an employee of FTI Consulting, Inc. (“FTI”), will succeed Messrs. McDermott and Hammond as the sole trustee of the
Liquidating Trust (in such capacity, the “Liquidating Trustee”), and Messrs. McDermott and Hammond will cease to serve as
trustees of the Liquidating Trust. Following execution of the Trust Agreement, Messrs. McDermott, Hammond and Chertok provided notice
of acceptance of their appointments as trustees of the Liquidating Trust to the qualified beneficiaries thereof as required by Maryland
law. A copy of such notice is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein. Neither Mr.
Hammond nor Mr. McDermott has received or will receive any fees for their service as trustees of the Liquidating Trust. The Liquidating
Trust will pay $10,000 per month to FTI for the services of Mr. Chertok or any successor trustee employed by FTI at the time of service.
Additionally, certain services beyond the scope of the agreed-upon engagement for liquidating trustee services will be billed at an agreed-upon
hourly rate. The Trust Agreement vests the Liquidating Trustee with the authority to oversee the Liquidating Trust and manage the day-to-day
affairs of the Liquidating Trust. It is also expected that the Liquidating Trustee will retain FTI to provide certain accounting, financial
reporting and administrative services.
As contemplated in the Plan of Sale and Liquidation, the purpose of
the Liquidating Trust is to liquidate the remaining assets (which are expected to consist primarily of the net cash proceeds from property
sales) of the Liquidating Trust and distribute the amounts remaining in the Liquidating Trust, if any, after satisfaction of all remaining
liabilities (including any additional liabilities, costs and expenses that may arise during the wind-down process) as an additional liquidating
distribution to the holders of the Beneficial Interests upon completion of the wind-down process and in connection with termination of
the Liquidating Trust. In addition to the transfer on the Effective Date by the Company to the Liquidating Trust of amounts intended to
satisfy known liabilities, costs and expenses of the Company that are not satisfied prior to the Company’s dissolution (and that
will be satisfied by the Liquidating Trust as appropriate), as well as net costs or expenses expected to be satisfied by the Liquidating
Trust during the wind-down process, an additional cash reserve of approximately $9.5 million will also be transferred by the Company to
the Liquidating Trust on the Effective Date to cover liabilities, costs or expenses that exceed estimated amounts, as well as any unknown
or additional liabilities, costs or expenses that may arise prior to completion of the wind-down process. These transfers will be part
of the above-described transfer of assets and liabilities on the Effective Date. The actual amount and timing of payment of any additional
liquidating distribution(s) from the Liquidating Trust will be determined by the Liquidating Trustee in his sole discretion.
The Trust Agreement provides that the Liquidating Trust will terminate
upon the earlier of the distribution of all of the Liquidating Trust’s assets in accordance with the terms of the Trust Agreement
and the expiration of a three-year period from the Effective Date. The existence of the Liquidating Trust may, however, be extended if
the Liquidating Trustee reasonably determines that an extension is necessary to fulfill the purposes of the Liquidating Trust.
Based on guidance previously provided by the SEC in similar circumstances,
it is expected that the Liquidating Trust will file with the SEC Annual Reports on Form 10-K (using the SEC file number of the Company)
with unaudited financial statements and Current Reports on Form 8-K (also filed using the SEC file number of the Company) upon the occurrence
of a material event relating to the Liquidating Trust. The Liquidating Trust is not required to file periodic reports on Form 10-Q, file
proxy statements, or present its financial statements in an interactive format through the use of XBRL based on such guidance.
The foregoing description of the Trust Agreement does not purport to
be complete and is qualified in its entirety by reference to the full text of the Trust Agreement, which is filed as Exhibit 10.1 to this
Current Report on Form 8-K and incorporated by reference herein.
Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On or about November 6, 2026, Tiffany Butcher and W. Drew Hammond,
each of whom is an executive officer of the Company (the “Officers”), are each expected to enter into a consulting agreement
with the Liquidating Trust (each, a “Consulting Agreement”). Pursuant to their respective Consulting Agreements, the Officers
are expected to agree to render such consulting services as may be reasonably requested from time to time by the Liquidating Trust to
facilitate the transition and wind-down of matters within the scope of such Officer’s knowledge and expertise and which relate to
the services performed by the Officer for the Company prior to November 6, 2026.
The Consulting Agreements are expected to have terms expiring on April
30, 2027, unless earlier terminated, and may be extended by mutual written agreement of both parties. The Consulting Agreements are expected
to provide for consideration of (i) $300 per hour for Ms. Butcher and (ii) $250 per hour for Mr. Hammond. The Consulting Agreements are
expected to contain customary indemnification obligations of the Liquidating Trust and confidentiality obligations of the Officers. The
Consulting Agreements are expected to provide for the ability to terminate such agreement by the mutual approval of the parties or by
either party with 30 days’ notice or due to an uncured material breach.
The foregoing description of the Consulting Agreements does not purport
to be complete and is qualified in its entirety by reference to the full text of the form of Consulting Agreement, which is filed as Exhibit
10.2 to this Current Report on Form 8-K and incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. |
Description |
| |
|
| 10.1 |
Liquidating Trust Agreement, dated as of October 7, 2026, by and among Elme Communities, Paul T. McDermott, W. Drew Hammond and Mark E. Chertok |
| 10.2 |
Form of Consulting Agreement with Elme Communities Liquidating Trust |
| 99.1 |
Elme Communities Liquidating Trust Notice of Trust Existence and Acceptance of Trusteeship. |
| 104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
Forward-Looking and Cautionary Statements
Certain statements in this Current Report on Form 8-K are “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties. Forward-looking
statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions
concerning matters that are not historical facts. In some cases, you can identify forward looking statements by the use of forward-looking
terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,”
“anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the
negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which
do not relate solely to historical matters. Such statements involve known and unknown risks, uncertainties, and other factors which may
cause the actual results, performance, or achievements of Elme to be materially different from future results, performance or achievements
expressed or implied by such forward-looking statements. Additional factors which may cause the actual results, performance, or achievements
of Elme to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements
include, but are not limited to: changes in the amount and timing of liquidating distributions from the Liquidating Trust as a result
of known liabilities or contingent costs or expenses that may be higher than anticipated liabilities, costs or expenses, or unknown liabilities,
costs or expenses that arise in the future which Elme cannot reasonably estimate at this time; the outcome of legal proceedings that may
be instituted against Elme, its former trustees and others, including those related to the sale of 19 multifamily assets to an affiliate
of Cortland Partners, LLC, and other completed sales and the Plan of Sale and Liquidation; whether or not the sale of one or more
of Elme’s properties may be considered a prohibited transaction under the Internal Revenue Code of 1986, as amended; general economic
developments and conditions; and volatility and uncertainty in the financial markets.
The foregoing list of factors is not exhaustive. You should carefully
consider the foregoing factors and the other risks and uncertainties that affect Elme’s businesses in the “Risk Factors”
section of Elme’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed by Elme, as well as other documents filed
by Elme or the Liquidating Trust from time to time with the SEC. Copies of the documents filed by Elme with the SEC are available free
of charge through the website maintained by the SEC at http://www.sec.gov, and are also available, free of charge, on Elme’s
website at www.elmecommunities.com. These filings identify and address other important risks and uncertainties that could cause actual
events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only
as of the date they are made. While forward-looking statements reflect Elme’s good faith beliefs, they are not guarantees of future
performance. Elme and the Liquidating Trust undertake no obligation to update the forward-looking statements or risk factors to reflect
new information, future events, or otherwise.
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.
| |
|
ELME COMMUNITIES |
| |
|
|
|
| |
November 6, 2026 |
By: |
/s/ W. Drew Hammond |
| |
|
|
W. Drew Hammond |
| |
|
|
Executive Vice President, Chief Financial Officer, Chief Administrative Officer and Treasurer |
Exhibit 99.1
ELME COMMUNITIES LIQUIDATING TRUST
NOTICE OF TRUST EXISTENCE AND ACCEPTANCE OF
TRUSTEESHIP
November 4, 2026
NOTICE IS HEREBY PROVIDED by the Initial Trustees
and Successor Trustee (each as defined below) of Elme Communities Liquidating Trust (the “Trust”) in accordance with Section 14.5-813(b) of
the Estates and Trusts Article of the Annotated Code of Maryland as follows:
On October 7, 2026, Paul T. McDermott and
W. Drew Hammond (the “Initial Trustees”) each accepted the appointment to serve as an initial trustee of the Trust, the sole
qualified beneficiary of which as of that date is Elme Communities. The contact information for the Initial Trustees is provided below:
Paul T. McDermott
7550 Wisconsin Avenue, Suite 900
Bethesda, MD 20814
202-774-3200
pmcdermott@elmecommunities.com |
W. Drew Hammond
7550 Wisconsin Avenue, Suite 900
Bethesda, MD 20814
202-774-3200
dhammond@elmecommunities.com |
Also on October 7, 2026, Mark E. Chertok
(the “Successor Trustee”) accepted the appointment to serve as successor trustee of the Trust, with his service as successor
trustee to commence after the assets and liabilities of Elme Communities are transferred to the Trust on November 6, 2026, at which
time the beneficial owners of the common shares of beneficial interest of Elme Communities will become the qualified beneficiaries of
the Trust. The interests of the qualified beneficiaries of the Trust will not be certificated and will not be transferable subject to
certain exceptions related to transfer by will, intestate succession or operation of law. The contact information for the successor Trustee
is provided below:
Mark E. Chertok
Elme Communities Liquidating Trust
c/o FTI Consulting, Inc.
56 Livingston Avenue, Suite 400
Roseland, NJ 07068
202-346-8829
ELMETrustee@fticonsulting.com
The settlor of the Trust is Elme Communities, a Maryland real estate
investment trust.
Qualified beneficiaries of the Trust have the right to request a copy
of the trust instrument from the Trustee(s). In addition, upon the request of any qualified beneficiary, the Trustees will send to such
qualified beneficiary annually and at the termination of the Trust a report of the Trust property, liabilities, receipts, and disbursements,
including the source and amount of the compensation of the Trustees, a listing of the Trust assets, and, if feasible, the respective market
values of the Trust assets.
This notice is for information only. It does not require you to take
any action. If you have any questions regarding this notice or the Trust, please contact the Trustees using the contact information provided
above.
Sincerely,
| /s/ Paul T. McDermott |
|
| Paul T. McDermott |
|
| |
|
| Initial Trustee of Elme Communities Liquidating
Trust |
|
| |
|
| /s/ W. Drew Hammond |
|
| W. Drew Hammond |
|
| |
|
| Initial Trustee of Elme Communities Liquidating
Trust |
|
| |
|
| /s/ Mark E. Chertok |
|
| Mark E. Chertok |
|
| |
|
| Subsequent Trustee of Elme Communities Liquidating
Trust |
|
