CBL CBL and Associates Properties Inc

ITEM 3.02 Unregistered Sales of Equity Securities.

Effective July 24, 2020, CBL & Associates Properties, Inc. (herein the “Company” or “CBL”), acting through its wholly owned subsidiary that serves as the general partner of CBL & Associates Limited Partnership, the Company’s operating partnership (the “Operating Partnership”), approved the issuance, pursuant to the terms of the Fourth Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”) of the Operating Partnership of an aggregate of 1,783,403 shares of the Company’s common stock, par value $.01 per share (the “Common Stock”) in response to exchange notices previously received from the following limited partners who may be considered affiliates of the Company (other than Ben S. Landress, who became an emeritus officer of the Company effective May 8, 2020), covering a like number of common units of limited partnership in the Operating Partnership:

These exchanges are expected to close July 31, 2020.

In addition, effective July 23, 2020, pursuant to an exchange notice previously received from non-affiliate John N. Foy, the Company issued, pursuant to the terms of the Partnership Agreement, 338,331 shares of the Company’s Common Stock in exchange for a like number of common units of limited partnership in the Operating Partnership.  The pending July 31 closing on the exchanges listed in the table above, in combination with the previous closing on shares issued to Mr. Foy, will result in an aggregate of 2,121,784 shares of Common Stock having been issued in such exchange transactions since the filing of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.

The Company’s election to issue shares of Common Stock pursuant to these exchange transactions was made in accordance with the Company’s right to deliver either shares of Common Stock, or their cash equivalent (as determined pursuant to the Partnership Agreement), to complete such exchanges.  We believe these share issuances are exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof, because they did not involve a public offering or sale.  No underwriters, brokers or finders were involved in any of these transactions.  

The issuance of these shares of Common Stock does not impact the fully diluted ownership of the Company by the exchanging holders listed in the table above, as disclosed in the beneficial ownership tables in the Company’s annual meeting proxy statements, because ownership of Operating Partnership units potentially convertible into shares of the Company’s Common Stock is already reflected in such calculations of fully diluted ownership.

The Company has been advised that certain Company executives who were involved in these transactions, either directly or through their ownership of a portion of the equity in CBL’s Predecessor, may elect in the future to sell shares of Common Stock that they held prior to the completion of these exchange transactions for tax planning purposes, and some of those sales may occur pursuant to one or more trading plans entered into pursuant to Securities and Exchange Commission Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended.