-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GjnSFqAw0vymE7mPVKE7Rh1gxSApSv5yZzUaUJPIlEwdGGuaa3xYS/DRyp7mry7l cW2booKI6NA9r7JYh8Cm2g== 0000317969-95-000002.txt : 19951031 0000317969-95-000002.hdr.sgml : 19951031 ACCESSION NUMBER: 0000317969-95-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951030 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES PARK COMMUNITIES LTD CENTRAL INDEX KEY: 0000317969 STANDARD INDUSTRIAL CLASSIFICATION: LAND SUBDIVIDERS & DEVELOPERS (NO CEMETERIES) [6552] IRS NUMBER: 953558497 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-10199 FILM NUMBER: 95585265 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29603 10QSB 1 FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Quarterly or Transitional Report (As last amended by 34-32231, eff. 6/3/93.) U.S. Securities and Exchange Commission Washington, D.C. 20549 Form 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period.........to......... Commission file number 0-10199 ANGELES PARK COMMUNITIES, LTD. (Exact name of small business issuer as specified in its charter) California 95-3558497 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (Zip Code) Issuer's telephone number (803) 239-1000 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) ANGELES PARK COMMUNITIES, LTD. CONSOLIDATED BALANCE SHEET (Unaudited)
September 30, 1995 Assets Cash: Unrestricted $ 73,431 Restricted--tenant security deposits 18,946 Accounts receivable 5,483 Escrow for taxes 170,683 Other assets 344,122 Investment properties: Land $ 1,043,112 Buildings and related personal property 4,735,594 5,778,706 Less accumulated depreciation (4,142,213) 1,636,493 $ 2,249,158 Liabilities and Partners' Deficit Liabilities Accounts payable $ 37,595 Tenant security deposits 18,946 Accrued taxes 124,306 Other liabilities 115,954 Mortgage notes payable 4,979,907 Partners' Deficit General partners' $ (162,195) Limited partners' (15,093 units issued and outstanding) (2,865,355) (3,027,550) $ 2,249,158
[FN] See Accompanying Notes to Consolidated Financial Statements b) ANGELES PARK COMMUNITIES, LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, 1995 1994 1995 1994 Revenues: Rental income $ 410,845 $ 394,813 $ 1,358,656 $ 1,287,356 Other income 3,037 5,179 100,440 15,677 Total revenues 413,882 399,992 1,459,096 1,303,033 Expenses: Operating 141,785 144,797 421,363 416,842 General and administrative 35,300 42,360 118,719 148,894 Property management fees 20,287 19,787 69,549 66,251 Maintenance 62,211 49,129 148,509 151,202 Depreciation 80,325 77,628 237,302 232,885 Interest 130,890 144,205 437,579 429,155 Property taxes 40,089 42,428 122,959 125,513 Bad debt expense(recovery) 5,756 -- (744,244) -- Tenant reimbursements (13,749) -- (25,348) -- Total expenses 502,894 520,334 786,388 1,570,742 (Loss) income before extraordinary item (89,012) (120,342) 672,708 (267,709) Extraordinary gain on early extinguishment of debt -- -- -- 6,467 Net (loss) income $ (89,012) $(120,342) $ 672,708 $ (261,242) Net (loss) income allocated to general partners (1%) $ (890) $ (1,203) $ 6,727 $ (2,612) Net (loss) income allocated to limited partners (99%) (88,122) (119,139) 665,981 (258,630) Net (loss) income $ (89,012) $(120,342) $ 672,708 $ (261,242) Per limited partnership unit: (Loss) income before extraordinary item $ (5.84) $ (7.88) $ 44.13 $ (17.54) Extraordinary gain -- -- -- .42 Net (loss) income $ (5.84) $ (7.88) $ 44.13 $ (17.12)
[FN] See Accompanying Notes to Consolidated Financial Statements c) ANGELES PARK COMMUNITIES, LTD. CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
September 30, 1995 (Unaudited) Limited Partnership General Limited Units Partners Partners Total Original capital contributions 15,112 $ 1,000 $15,112,000 $15,113,000 Partners' deficit at December 31, 1994 15,093 $(168,922) $(3,531,336) $(3,700,258) Net income for the nine months ended September 30, 1995 -- 6,727 665,981 672,708 Partners' deficit at September 30, 1995 15,093 $(162,195) $(2,865,355) $(3,027,550)
[FN] See Accompanying Notes to Consolidated Financial Statements d) ANGELES PARK COMMUNITIES, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, 1995 1994 Cash flows from operating activities: Net income (loss) $ 672,708 $ (261,242) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation 237,302 232,885 Amortization of loan costs 49,939 17,005 Extraordinary gain on early extinguishment of debt -- (6,467) Bad debt expense 5,756 -- Change in accounts: Restricted cash (14,317) (11,560) Accounts receivable 172,280 2,529 Escrows for taxes (159,269) 51,915 Other assets (749,109) (23,054) Accounts payable 5,741 (4,045) Tenant security deposit liabilities 12,695 12,123 Accrued taxes 56,958 (39,580) Other liabilities (144,344) (215,965) Net cash provided by (used in) operating activities 146,340 (245,456) Cash flows from investing activities: Property improvements and replacements (34,914) (17,410) Proceeds from AMIT investment 750,000 -- Net cash provided by (used in) investing activities 715,086 (17,410) Cash flows from financing activities: Payments on mortgage notes payable (937,503) (30,156) Proceeds from refinancing -- 5,950,000 Repayment of loans -- (5,385,185) Loan costs -- (416,156) Net cash (used in) provided by financing activities (937,503) 118,503 Net decrease in cash (76,077) (144,363) Cash at beginning of period 149,508 210,740 Cash at end of period $ 73,431 $ 66,377 Supplemental disclosure of cash flow information: Cash paid for interest $ 391,949 $ 600,044
[FN] See Accompanying Notes to Consolidated Financial Statements e) ANGELES PARK COMMUNITIES, LTD. NOTES TO FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the Managing General Partner, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine month period ended September 30, 1995, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1995. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the fiscal year ended December 31, 1994. Certain reclassifications have been made to the 1994 information to conform to the 1995 presentation. Note B - Transactions with Affiliated Parties The Partnership has no employees and is dependent on the Managing General Partner and its affiliates for the management and administration of all partnership activities. The Partnership Agreement provides for payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following amounts were paid to the Managing General Partner and affiliates during the nine months ended September 30, 1995 and 1994: 1995 1994 Property management fees $69,549 $66,251 Reimbursement for services of affiliates 70,514 65,076 The Partnership insures its properties under a master policy through an agency and insurer unaffiliated with the Managing General Partner. An affiliate of the Managing General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the Managing General Partner, who receives payments on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the Managing General Partner by virtue of the agent's obligations is not significant. In November 1992, Angeles Acceptance Pool, L.P. ("AAP"), a Delaware limited partnership was organized to acquire and hold the obligations evidencing the working capital loan previously provided to the Partnership by Angeles Capital Investments, Inc. ("ACII"). Angeles Corporation ("Angeles") is the 99% limited partner of AAP and Angeles Acceptance Directives, Inc. ("AAD"), an affiliate of the Managing General Partner, was, until April 14, 1995, the 1% general partner of AAP. On April 14, 1995, as part of a settlement of claims between affiliates of the Managing General Partner and Angeles, AAD resigned as general partner of AAP and simultaneously received a 1/2% limited partner interest in AAP. An affiliate of Angeles now serves as the general partner of AAP. This working capital loan from AAP provided funding for the Partnership's operating deficits in prior years. Total interest expense for this loan was $4,119 for the nine months ended September 30, 1994. During the second quarter of 1994, the principal and accrued interest due on this loan was paid in full as a result of the refinancing of the mortgage indebtedness of the Partnership. In July 1993, Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust, formerly affiliated with Angeles, initiated litigation against the Partnership and other partnerships which loaned money to AMIT seeking to avoid repayment of such obligations. The Partnership subsequently filed a counterclaim against AMIT seeking to enforce the obligation, the principal amount of which was $750,000 plus accrued interest from March 1993 ("AMIT Obligation"). MAE GP Corporation ("MAE GP"), an affiliate of the Managing General Partner, owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to receive 1% of the distributions of net cash distributed by AMIT. These Class B Shares also entitle MAE GP to vote on the same basis as Class A Shares which allows MAE GP to vote approximately 37% of the total shares (unless and until converted to Class A Shares at which time the percentage of the vote controlled represented by the shares held by MAE GP would approximate 1% of the vote). Between the date of acquisition of these shares (November 24, 1992) and March 31, 1995, MAE GP had declined to vote these shares. Since that date, MAE GP voted its shares at the 1995 annual meeting in connection with the election of trustees and other matters. MAE GP has not exerted and continues to decline to exert any management control over or participate in the management of AMIT. However, MAE GP may choose to vote these shares as it deems appropriate in the future. On November 9, 1994, the Partnership executed a definitive Settlement Agreement to settle the dispute with respect to the AMIT Obligation. The actual closing of the Settlement occurred April 14, 1995. The Partnership's claim was satisfied by a cash payment to the Partnership totalling $827,250 (the "Settlement Amount") at closing. As part of the above described settlement, MAE GP granted to AMIT an option to acquire the Class B Shares owned by it. This option can be exercised at the end of 10 years or when all loans made by AMIT to partnerships affiliated with MAE GP as of November 9, 1994, (which is the date of execution of a definitive Settlement Agreement), have been paid in full, but in no event prior to November 9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at closing, which occurred April 14, 1995, as payment for the option. Upon exercise of the option, AMIT would remit to MAE GP an additional $94,000. Note B - Transactions with Affiliated Parties - (continued) Simultaneously with the execution of the option, MAE GP executed an irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to vote the Class B Shares on all matters except those involving transactions between AMIT and MAE GP affiliated borrowers or the election of any MAE GP affiliate as an officer or trustee of AMIT. On those matters, MAE GP granted to the AMIT trustees, in their capacity as trustees of AMIT, proxies with regard to the Class B Shares instructing such trustees to vote said Class B Shares in accordance with the vote of the majority of the Class A Shares voting to be determined without consideration of the votes of "Excess Class A Shares" as defined in Section 6.13 of the Declaration of Trust of AMIT. The Partnership filed a Proof of Claim in the bankruptcy proceeding of Angeles concerning the Partnership's indebtedness to AAP. The Proof of Claim alleged that instead of causing the Partnership to pay AAP on account of such debt, Angeles either itself or through an affiliate, caused the Partnership to make payment to another Angeles affiliate. To the extent that such action resulted in the Partnership not receiving credit for the payments so made, the Partnership would have been damaged in an amount equal to the misappropriated payments. On August 9, 1995, AAP acknowledged constructive receipt of such payment and therefore, the Managing General Partner withdrew this claim. Finally, the Managing General Partner of the Partnership has been informed by representatives of Angeles that, in connection with certain sales of properties in prior years, the Partnership paid an incentive fee of $840,000 to Angeles Real Estate Corporation ("ARECO"), a wholly owned subsidiary of Angeles. The last incentive fee, which was paid to ARECO without the knowledge of the current management of the Managing General Partner in January 1993, was equal to 4% of the sales price of the properties sold in 1992, or $167,000. The Managing General Partner originally believed that the incentive fees previously paid were not in accordance with the Partnership Agreement. As a result, the Partnership filed a claim against Angeles for the total fees, or $1,007,000. After investigating this matter further, it appears that the incentive fees may have been paid in accordance with the terms of the Partnership Agreement or that the manner in which they were paid may not give rise to a sustainable claim on behalf of the Partnership. However, it is possible that a claim for repayment of some or all of these fees could arise at some point in the future if sufficient distributions are not made to the partners to result in their receiving their original capital investment plus a cumulative return of 6%. In light of all of the facts and circumstances known at this time, the Managing General Partner has determined that the likelihood of success and significant recovery resulting from pursuit of a claim is not sufficient to warrant the costs which the Partnership would incur to pursue the claim. Therefore, the Managing General Partner withdrew this claim on August 9, 1995. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS The Partnership's investment properties consist of one mobile home park and one recreational vehicle park. The following table sets forth the average occupancy of the properties for the nine months ended September 30, 1995 and 1994: Average Occupancy Property 1995 1994 Cloverleaf Farms Brooksville, Florida 99% 100% Cloverleaf Forest (1) Brooksville, Florida 68% 64% (1) This investment property is a recreational vehicle park and occupancy typically declines during the second and third quarters. For the three and nine months ended September 30, 1995, the Partnership generated a net loss and net income of $89,012 and $672,708, respectively, as compared to a net loss for the three and nine months ended September 30, 1994, of $120,342 and $261,242, respectively. The increase in income for the nine months ended September 30, 1995, can primarily be attributed to the recovery of amounts previously written off as bad debt relating to a note receivable from Angeles Mortgage Investment Trust ("AMIT") (See discussion below). Total revenue increased for the three and nine months ended September 30, 1995, as compared to the three and nine months ended September 30, 1994, primarily due to an increase in other income. During the second quarter of 1995, the Partnership received $827,250 from AMIT in satisfaction of the $750,000 note receivable that the Partnership had from AMIT, of which $77,250 related to accrued interest on the note. In addition, the increase in rental income for the three and nine months ended September 30, 1995, versus the three and nine months ended September 30, 1994, can be attributed to increased rental rates at Cloverleaf Farms. General and administrative expenses decreased for the three and nine months ended September 30, 1995, as compared to the three and nine months ended September 30, 1994, as a result of a decrease in legal expenses. These legal expenses incurred during 1994 resulted from negotiations with AMIT regarding the note receivable. Due to the cash received from the AMIT settlement, bad debt recovery was recognized during 1995 in the amount of $750,000. This balance represents the principal amount on the note receivable from AMIT, which had previously been reserved. The bad debt expense of $5,756 for the third quarter of 1995 can be attributed to several tenants at Cloverleaf Farms suffering from deteriorating financial conditions resulting in delinquency in their payments; therefore, the Partnership reserved a portion of the receivable relating to this property during the three months ended September 30, 1995. In addition, the Partnership executed an agreement with the tenants of the Cloverleaf Farms investment property whereby certain operating, maintenance and tax expenses will be passed through to the tenants. The total of these reimbursements was $25,348 for the nine months ended September 30, 1995. In June 1994, Cloverleaf Farms refinanced its previous mortgage indebtedness creating an additional financing amounting to $950,000. As part of this refinancing, the Partnership was forgiven $6,467 in previously accrued interest. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the rental market environment of each of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expense. As part of this plan, the Managing General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the Managing General Partner will be able to sustain such a plan. At September 30, 1995, the Partnership had unrestricted cash of $73,431 as compared to $66,377 at September 30, 1994. Net cash provided by operating activities increased primarily due to the increased net income and the decrease in accounts receivable relating to a receivable the Partnership had from a previously owned investment property (See discussion below). Net cash provided by investing activities increased due to the receipt of $750,000, the principal amount of the note receivable the Partnership had from AMIT. Net cash used in financing activities increased as a result of an $800,000 principal paydown on the second mortgage for Cloverleaf Farms. The Partnership had a $325,000 receivable from the tenants of an investment property that was sold in July 1987. The receivable related to mandatory water and sewer improvements imposed by the State of Florida. The Partnership paid for these improvements and expected to be reimbursed by the tenants. Due to the previous uncertainty of collection of such receivable, the Partnership fully reserved for the receivable at December 31, 1993. At December 31, 1994, the Managing General Partner of the Partnership had reached an agreement as to the settlement amount of this receivable, which amounted to $172,000. As a result, the Partnership received $172,000 as a final settlement of the receivable. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of $4,979,907 consists of a first mortgage of $4,960,642, which is being amortized over 30 years with a balloon payment of $4,692,343 due on July 15, 2001, and a second mortgage of $19,265. As mentioned previously, the Partnership paid $800,000 in principal on the second mortgage in June 1995. This note will be paid off in November 1995. The Managing General Partner is in negotiations to sell the Partnership's remaining investment properties. The outcome of such negotiations is uncertain at this time. If the properties are not then sold, upon maturity of the first mortgage, the properties will either be refinanced or sold. Future cash distributions will depend on the levels of net cash generated from operations, property sales and the availability of cash reserves. There were no cash distributions in the first nine months of 1995. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In July 1993, Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust, formerly affiliated with Angeles Corporation ("Angeles"), initiated litigation against the Partnership and other partnerships which loaned money to AMIT seeking to avoid repayment of such obligations. The Partnership subsequently filed a counterclaim against AMIT seeking to enforce the obligation, the principal amount of which was $750,000 plus accrued interest from March 1993 ("AMIT Obligation"). MAE GP Corporation ("MAE GP"), an affiliate of the Managing General Partner, owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to receive 1% of the distributions of net cash distributed by AMIT. These Class B Shares also entitle MAE GP to vote on the same basis as Class A Shares which allows MAE GP to vote approximately 37% of the total shares (unless and until converted to Class A Shares at which time the percentage of the vote controlled represented by the shares held by MAE GP would approximate 1% of the vote). Between the date of acquisition of these shares (November 24, 1992) and March 31, 1995, MAE GP has declined to vote these shares. Since that date, MAE GP voted its shares at the 1995 annual meeting in connection with the election of trustees and other matters. MAE GP has not exerted and continues to decline to exert any management control over or participate in the management of AMIT. However, MAE GP may choose to vote these shares as it deems appropriate in the future. On November 9, 1994, the Partnership executed a definitive Settlement Agreement to settle the dispute with respect to the AMIT Obligation. The actual closing of the settlement occurred April 14, 1995. The Partnership's claim was satisfied by a cash payment to the Partnership totalling $827,250 (the "Settlement Amount") at closing. As part of the above described settlement, MAE GP granted to AMIT an option to acquire the Class B Shares owned by it. This option can be exercised at the end of 10 years or when all loans made by AMIT to partnerships affiliated with MAE GP as of November 9, 1994, (which is the date of execution of a definitive Settlement Agreement) have been paid in full, but in no event prior to November 9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at closing, which occurred April 14, 1995, as payment for the option. Upon exercise of the option, AMIT would remit to MAE GP an additional $94,000. Simultaneously with the execution of the option, MAE GP executed an irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to vote the Class B Shares on all matters except those involving transactions between AMIT and MAE GP affiliated borrowers or the election of any MAE GP affiliate as an officer or trustee of AMIT. On those matters, MAE GP granted to the AMIT trustees, in their capacity as trustees of AMIT, proxies with regard to the Class B Shares instructing such trustees to vote said Class B Shares in accordance with the vote of the majority of the Class A Shares voting to be determined without consideration of the votes of "Excess Class A Shares" as defined in Section 6.13 of the Declaration of Trust of AMIT. The Partnership filed a Proof of Claim in the bankruptcy proceeding of Angeles concerning the Partnership's indebtedness to Angeles Acceptance Pool, L.P. ("AAP"). The Proof of Claim alleged that, instead of causing the Partnership to pay AAP on account of such debt, Angeles, either itself or through an affiliate, caused the Partnership to make payment to another Angeles affiliate. To the extent that such action resulted in the Partnership not receiving credit for the payments so made, the Partnership would have been damaged in an amount equal to the misappropriated payments. On August 9, 1995, AAP acknowledged constructive receipt of such payment and therefore, the Managing General Partner withdrew this claim. Finally, the Managing General Partner of the Partnership has been informed by representatives of Angeles that, in connection with certain sales of properties in prior years, the Partnership paid an incentive fee of $840,000 to Angeles Real Estate Corporation ("ARECO"), a wholly owned subsidiary of Angeles. The last incentive fee, which was paid to ARECO without the knowledge of the current management of the Managing General Partner in January 1993, was equal to 4% of the sales price of the properties sold in 1992, or $167,000. The Managing General Partner originally believed that the incentive fees previously paid were not in accordance with the Partnership Agreement. As a result, the Partnership filed a claim against Angeles for the total fees, or $1,007,000. After investigating this matter further, it appears that the incentive fees may have been paid in accordance with the terms of the Partnership Agreement or that the manner in which they were paid may not give rise to a sustainable claim on behalf of the Partnership. However, it is possible that a claim for repayment of some or all of these fees could arise at some point in the future if sufficient distributions are not made to the partners to result in their receiving their original capital investment plus a cumulative return of 6%. In light of all of the facts and circumstances known at this time, the Managing General Partner has determined that the likelihood of success and significant recovery resulting from pursuit of a claim is not sufficient to warrant the costs which the Partnership would incur to pursue the claim. Therefore, the Managing General Partner withdrew this claim on August 9, 1995. The Registrant is unaware of any other pending or outstanding litigation that is not of a routine nature. The Managing General Partner of the Registrant believes that all such pending or outstanding litigation will be resolved without a material adverse effect upon the business, financial condition or operations of the Partnership. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: Exhibit 27 - Financial Data Schedule, is filed as an exhibit to this report. b) Reports on From 8-K: None filed during the quarter ended September 30, 1995. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ANGELES PARK COMMUNITIES, LTD. By: Angeles Realty Corporation Managing General Partner By: /s/Carroll D. Vinson Carroll D. Vinson President, Director By: /s/Robert D. Long, Jr. Robert D. Long, Jr. Controller and Principal Accounting Officer Date: October 27, 1995 -----END PRIVACY-ENHANCED MESSAGE-----