-----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, OUjq8dWh7M29BZAQKaVWvfk8e7e3q41Q7XBNAeGuCb81iopgQ/ip9/wmzz5xYJ63 CYwRFvt+LkOg5172HaAM1w== 0000317969-96-000001.txt : 19960509 0000317969-96-000001.hdr.sgml : 19960509 ACCESSION NUMBER: 0000317969-96-000001 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960508 SROS: NONE 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: 96558046 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 March 31, 1996 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act For the transition period from.........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 (I.R.S. 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 (864) 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) (in thousands, except unit data) March 31, 1996 Assets Cash and cash equivalents: Unrestricted $ 198 Restricted--tenant security deposits 12 Accounts receivable, less allowance of $10 8 Escrow for taxes 75 Other assets 274 Investment properties: Land $ 1,043 Buildings and related personal property 4,808 5,851 Less accumulated depreciation (4,303) 1,548 $ 2,115 Liabilities and Partners' Deficit Liabilities Accounts payable $ 36 Tenant security deposits 12 Other liabilities 224 Mortgage note payable 4,942 Partners' Deficit General partners $ (163) Limited partners (15,093 units issued and outstanding) (2,936) (3,099) $ 2,115 See Accompanying Notes to Consolidated Financial Statements b) ANGELES PARK COMMUNITIES, LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended March 31, 1996 1995 Revenues: Rental income $ 504 $ 515 Other income 17 6 Total revenues 521 521 Expenses: Operating 177 156 General and administrative 41 42 Maintenance 23 22 Depreciation 81 78 Interest 125 157 Property taxes 54 41 Total expenses 501 496 Net income $ 20 $ 25 Net income allocated to general partners (1%) $ -- $ -- Net income allocated to limited partners (99%) 20 25 $ 20 $ 25 Net income per limited partnership unit $ 1.33 $ 1.66 See Accompanying Notes to Consolidated Financial Statements c) ANGELES PARK COMMUNITIES, LTD. CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT March 31, 1996 (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 15,112 $ 1 $ 15,112 $ 15,113 Partners' deficit at December 31, 1995 15,093 $ (163) $ (2,956) $ (3,119) Net income for the three months ended March 31, 1996 -- -- 20 20 Partners' deficit at March 31, 1996 15,093 $ (163) $ (2,936) $ (3,099) See Accompanying Notes to Consolidated Financial Statements
d) ANGELES PARK COMMUNITIES, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three Months Ended March 31, 1996 1995 Cash flows from operating activities: Net income $ 20 $ 25 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 81 78 Amortization of loan costs and discounts 12 17 Change in accounts: Restricted cash (9) (12) Accounts receivable 1 174 Escrows for taxes (44) (65) Other assets -- 2 Accounts payable -- (20) Tenant security deposit liabilities 9 12 Other liabilities 9 (160) Net cash provided by operating activities 79 51 Cash flows used in investing activities: Property improvements and replacements (53) -- Cash flows used in financing activities: Payments on mortgage notes payable (9) (53) Net increase (decrease) in cash 17 (2) Cash and cash equivalents at beginning of period 181 150 Cash and cash equivalents at end of period $ 198 $ 148 Supplemental disclosure of cash flow information: Cash paid for interest $ 113 $ 140 See Accompanying Notes to Consolidated Financial Statements
e) ANGELES PARK COMMUNITIES, LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited consolidated 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 three month period ended March 31, 1996, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1996. For further information, refer to the financial statements and footnotes thereto included in Angeles Park Communities, Ltd.'s (the "Partnership") annual report on Form 10- KSB for the fiscal year ended December 31, 1995. Certain reclassifications have been made to the 1995 information to conform to the 1996 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 three months ended March 31, 1996 and 1995: 1996 1995 (in thousands) Property management fees $25 $26 Reimbursement for service of affiliates 29 22 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. Note B - Transactions with Affiliated Parties - (continued) 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"). This amount was fully reserved in 1993. 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 by AMIT totalling $827,250 (the "Settlement Amount") at closing, of which $750,000 was payment of the obligation mentioned above and $77,250 was previously unrecognized interest income. 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 1.2% 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 1.2% of the vote). Between the date of acquisition of these shares (November 24, 1992) and March 31, 1995, MAE GP 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. MAE GP may choose to vote these shares as it deems appropriate in the future. In addition, Liquidity Assistance, LLC, ("LAC"), an affiliate of the Managing General Partner and an affiliate of Insignia Financial Group, Inc., which provides property management and partnership administration services to the Partnership, owns 63,200 Class A Shares of AMIT. These Class A Shares entitle LAC to vote approximately 1.5% of the total shares. 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 on 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, the Managing General Partner determined that the likelihood of success and significant recovery resulting from pursuit of a claim would not be 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 OPERATION 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 three months ended March 31, 1996 and 1995: Average Occupancy Property 1996 1995 Cloverleaf Farms, Mobile Home Park 99% 99% Brooksville, Florida Cloverleaf Forest, Recreational 84% 82% Vehicle Park Brooksville, Florida For the three months ended March 31, 1996, the Partnership generated net income of $20,000 versus net income of $25,000 for the three months ended March 31, 1995. The Partnership did not experience significant changes in total revenues or total expenses during the three months ended March 31, 1996, as compared to the three months ended March 31, 1995. The Partnership experienced an increase in rental income at the mobile home park which was offset by a decrease in rental income at the recreational vehicle park. The increase in rental income at the mobile home park is attributable to an increase in rental rates. Rental income at the recreational vehicle park decreased due to the severe winter experienced in the northern United States. Due to the severe weather conditions, many vacationers did not make the trip south this winter. The increase in other income is due primarily to increases in deposit forfeitures and sales commissions. The increase in deposit forfeitures, which primarily occurred at the recreational vehicle park, was due to vacationers not making the trip south due to the harsh winter. The increase in sales commissions was due to the Partnership receiving sales commissions on several lots that were sold at the mobile home park. Increases in operating and property tax expense were substantially offset by a decrease in interest expense. The increase in operating expense was due primarily to increases in water, sewer and utility charges. Additionally, legal fees increased related to efforts to collect certain tenant reimbursements related to past years. Interest expense decreased due to the Partnership paying off the second mortgage debt in late 1995. Also contributing to this decrease was a decrease in loan cost amortization related to the pay off of the second mortgage. Property taxes increased due to an increase in the assessed value of the properties. 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 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 March 31, 1996, the Partnership had unrestricted cash of $198,000 versus $148,000 at March 31, 1995. The increase in cash provided by operating activities was primarily due to a smaller increase in the escrow for taxes in the three months ended March 31, 1996, as compared to the increase in the three months ended March 31, 1995. The increase in cash used in investing activities is attributable to increased spending on capital improvement projects. Cash used in financing activities decreased due to lower mortgage principal payments due to the pay off of the second mortgage debt in late 1995. 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. The mortgage indebtedness of $4,942,000 is being amortized over 30 years with a balloon payment of $4,692,000 due in July 2001 at which time 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 during the three months ended March 31, 1996 or the three months ended March 31, 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, 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"). This amount was fully reserved in 1993. 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 by AMIT totalling $827,250 (the "Settlement Amount") at closing, of which $750,000 was payment of the obligation mentioned above and $77,250 was previously unrecognized interest income. 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 1.2% 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 1.2% of the vote). Between the date of acquisition of these shares (November 24, 1992) and March 31, 1995, MAE GP 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. MAE GP may choose to vote these shares as it deems appropriate in the future. In addition, Liquidity Assistance, LLC, ("LAC"), an affiliate of the Managing General Partner and an affiliate of Insignia Financial Group, Inc., which provides property management and partnership administration services to the Partnership, owns 63,200 Class A Shares of AMIT. These Class A Shares entitle LAC to vote approximately 1.5% of the total shares. 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 on 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 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, the Managing General Partner determined that the likelihood of success and significant recovery resulting from pursuit of a claim would not be 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 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: None. b) Reports on From 8-K: None filed during the quarter ended March 31, 1996. 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 By: /s/Robert D. Long, Jr. Robert D. Long, Jr. Vice President/CAO Date: May 8, 1996 EX-27 2
5 This schedule contains summary financial information extracted from Angeles Park Communities Ltd. 1996 First Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000317969 ANGELES PARK COMMUNITIES LTD. 1,000 3-MOS DEC-31-1996 MAR-31-1996 198 0 8 10 0 0 5,851 4,303 2,115 0 4,942 0 0 0 (3,099) 2,115 0 521 0 0 501 0 125 20 0 20 0 0 0 20 1.33 0 The Registrant has an unclassified balance sheet.
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