ST. JAMES, N.Y., Nov. 19, 2012 /PRNewswire/ -- Gyrodyne Company of America, Inc. (NASDAQ: GYRO) announced today that its Board of Directors declared a special cash dividend in the amount of $56,786,644, or $38.30 per share. The dividend is payable on December 14, 2012 to stockholders of record as of December 1, 2012. The special dividend represents over 90% of the Company's REIT taxable income earned through September 30, 2012. REITs are required annually to distribute to shareholders at least 90% of their REIT taxable income in order to preserve their REIT status under the Internal Revenue Code.
In July 2012, the Company received $167,530,657 from the State of New York in payment of the judgments in the Company's favor in the Company's condemnation litigation with the State, of which $98,685,000 is deferred for income tax purposes and $68,845,657 is considered REIT taxable income in the current year. As a result, the Board determined that it was in the best interests of shareholders to distribute $56,786,644 in the form of a cash dividend. The declaration of the dividend also requires a cash payment to participants of the Company's Incentive Compensation Plan in the aggregate amount of $4,213,000 to be allocated and paid to Plan participants in accordance with Plan rules.
In accordance with Section 1033 of the Internal Revenue Code, the Company has deferred recognition of the $98,685,000 gain on the condemnation of its real property for income tax purposes. The Company previously applied for and received an additional approved Internal Revenue Service extension of time to replace the condemned property with like-kind property by April 30, 2014. If the Company replaces the condemned property with like-kind property by April 30, 2014 (or such extended period approved by the IRS at its discretion), recognition of the gain is deferred until the newly acquired property is disposed of.Paul Lamb, Chairman of the Board of Gyrodyne, said, "Today's dividend declaration marks an important milestone in Gyrodyne's strategic plan. Over the past few years, Gyrodyne has positioned itself for one or more liquidity events that will maximize shareholder value. The ability to share the fruits of the condemnation award directly with our shareholders is extremely gratifying. We look forward to implementing and executing additional events that will provide liquidity and value to our shareholders." There can be no assurance concerning the type, form, structure, nature, results, timing or terms and conditions of any transaction that may result from the Company's strategic process or that a transaction will occur at all. Gyrodyne does not intend to disclose developments regarding the process unless and until the Board of Directors has approved a definitive course of action.