- 06/26/14 - Amendment No. 3 to Preliminary Proxy Statement
- To download the full SEC filing Click Here.
- 06/05/14 - GYRODYNE COMPANY OF AMERICA, INC. ANNOUNCES DATE OF SPECIAL MEETING
- To view the full Press Release Click Here.
- 12/20/13 - GYRODYNE COMPANY OF AMERICA, INC. ANNOUNCES FINAL DETAILS OF SPECIAL DIVIDENDS
- To view the full Press Release Click Here.
THE GYRODYNE STORY
To appreciate Gyrodyne’s position today and what its board and management expect to achieve, we need to briefly look back to 1946 when Peter James Papadakos purchased the assets of the bankrupt Bendix Helicopter Company and leased space at the small Fitzmaurice (Air) Field in Massapequa, where development continued on the coaxial rotor helicopter. Fast forward to 1951 when operations were moved to St. James and a location called Flowerfield, not surprisingly used previously as a flower nursery. Manufacturing continued on the Company’s coaxial helicopters in an aggressive fashion, and by 1963, there were over 700 employees worldwide, many of whom supported the Drone Anti-Submarine Helicopter (DASH) Weapons System. However, the ensuing years witnessed a decline in government contracts for Gyrodyne and beginning in 1972, some of the former manufacturing space was converted into smaller rental units suitable for light industry. In 1999, the remaining assets of the drone program were sold with much of the continuing interest concentrated overseas. Despite the extremely active drone programs currently underway both militarily and in private industry, the last Gyrodyne designed drone had flown its final flight in 2006. For additional and very detailed and documented information on the Company’s history and manufacturing, visit the following website: www.gyrodynehelicopters.com
At the same time Gyrodyne was slowing down its manufacturing operations, rental demand for its facilities was increasing. Prior to New York State’s condemnation action in the Fall of 2005, Gyrodyne had approximately 180,000 square feet of space available for lease. In November of 2005, New York State through the powers of eminent domain took 245 acres and the buildings located thereon, reducing our rentable space to 130,000 square feet. The State paid Gyrodyne $26 million for the property, which Gyrodyne treated as an advance payment as it pursued an action against the State for just compensation.
Shortly thereafter, and in order to minimize corporate-level taxes, Gyrodyne was converted into a real estate investment trust, or REIT, and in accordance with REIT provisions, we invested the initial $26 million of condemnation proceeds in income producing properties located in Port Jefferson, Cortlandt Manor & Fairfax, Virginia.
After extensive litigation and the appeals process, on July 3, 2012, Gyrodyne received $98,685,000 in additional damages, $67,341,716 in interest and $1,474,941 for costs, disbursements and expenses. On December 14, 2012, we paid a dividend of $56,786,652 or $38.30 per share.
Shortly after receiving monies from the State in July, we launched a strategic process with the help of Rothschild, Inc. and the law firm of Skadden, Arps, Slate, Meagher & Flom, LLP to maximize shareholder value through one or more cash distributions and/or through a potential sale, merger or other strategic combination. During that process and in early 2013, we requested and ultimately received from the Internal Revenue Service a private letter ruling which enabled Gyrodyne to distribute the full $98.7 million of additional damages to our shareholders while avoiding a corporate level federal income tax of $61.6 million. The private letter ruling was received in late August resulting in the Board’s press release of September 13, 2013, and the announcement of a special dividend. The special dividend was paid on December 30, 2013 in the form of $68 million or $45.86 per share in cash with the balance of $30.7 million or $20.70 per share paid in uncertificated shares of a newly formed subsidiary, Gyrodyne Special Distribution, LLC (GSD) into which we transferred our real properties shortly before the distribution. While the strategic process did not result in an offer to buy the Company that the board considered acceptable, during 2012 and 2013, we were successful in distributing cash dividends of approximately $125 million to our shareholders. In addition, on January 31, 2014, Gyrodyne issued interests in a global dividend note to our shareholders in the amount of $16,150,000 representing the major portion of Gyrodyne’s 2013 REIT income, the per share interest in the note amounting to $10.89.
To further enhance the value of the special dividend, the Board also approved a plan of merger which requires the approval of shareholders holding at least two-thirds of our shares, and if completed in a timely manner, will allow the special dividend to be treated as a return of capital to the extent of the shareholders’ tax basis and then taxed at capital gains rates. In that regard, within a few weeks, shareholders will receive our proxy statement and be asked to approve a merger whereby Gyrodyne Company of America, Inc. and GSD will be merged with Gyrodyne, LLC, a newly formed subsidiary, which will be the surviving company and is intended to be publicly traded. The merger will facilitate the final step in the tax liquidation of Gyrodyne while simplifying the corporate structure and interrelationships of Gyrodyne and GSD, and restoring liquidity to GSD and the dividend notes.
As mentioned in some of the Company’s previously posted SEC filings, we are also attempting to sell our medical properties while analyzing the highest and best use for the development of the open Flowerfield acreage.