-----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, QHNu7/m+GCVWmMutUlNopBXDzeRYZ1yswAIo9jJh9SRXd5C4cvX9P86qvTXghYTY X9Iim5XPRvuLEnRJmsGLTQ== 0000914317-98-000361.txt : 19980518 0000914317-98-000361.hdr.sgml : 19980518 ACCESSION NUMBER: 0000914317-98-000361 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTEGRATED RESOURCES HIGH EQUITY PARTNERS SERIES 85 CENTRAL INDEX KEY: 0000730067 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 133239107 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14438 FILM NUMBER: 98625720 BUSINESS ADDRESS: STREET 1: 411 WEST PUTNAM AVE CITY: GREENWICH STATE: CT ZIP: 06830 BUSINESS PHONE: 2038627000 MAIL ADDRESS: STREET 1: 411 WEST PUTNAM AVENUE CITY: GREENWICH STATE: CT ZIP: 06830 FORMER COMPANY: FORMER CONFORMED NAME: HIGH EQUITY PARTNERS SERIES 85 DATE OF NAME CHANGE: 19850626 FORMER COMPANY: FORMER CONFORMED NAME: RESOURCES HIGH EQUITY PARTNERS DATE OF NAME CHANGE: 19850203 10-Q 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 Commission file number 0-14438 INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 A CALIFORNIA LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) CALIFORNIA 13-3239107 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 411 West Putnam Avenue, Greenwich, CT 06830 (Address of principal executive offices) (203) 862-7444 (Registrant's telephone number, including area code) None (Former name, former address and former fiscal year, if changed since last report) Indicate by check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 [ ] INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 INDEX Part I. Financial Information: Balance Sheets - March 31, 1998 and December 31, 1997 Statements of Operations -- Three Months Ended March 31, 1998 and 1997 Statement of Partners' Equity -- Three Months Ended March 31, 1998 Statements of Cash Flows -- Three Months Ended March 31, 1998 and 1997 Notes to Financial Statements Management's Discussion and Analysis of Financial Condition and Results of Operations Part II. Other Information: Legal Proceedings, Exhibits and Reports on Form 8-K
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 BALANCE SHEETS March 31, December 31, 1998 1997 ----------- ----------- ASSETS Real estate - net .......................... $33,210,936 $33,033,710 Cash and cash equivalents .................. 5,031,833 4,350,887 Other assets ............................... 1,986,863 2,033,252 Receivables ................................ 148,703 182,568 ----------- ----------- $40,378,335 $39,600,417 =========== =========== LIABILITIES AND PARTNERS' EQUITY Accounts payable and accrued expenses ...... $ 1,524,817 $ 1,183,720 Distributions payable ...................... 395,799 395,799 Due to affiliates .......................... 485,898 577,739 ----------- ----------- 2,406,514 2,157,258 ----------- ----------- Commitments and contingencies PARTNERS' EQUITY: Limited partners' equity (400,010 units issued and outstanding) ..... 36,072,279 35,570,050 General partners' equity .............. 1,899,542 1,873,109 ----------- ----------- 37,971,821 37,443,159 ----------- ----------- $40,378,335 $39,600,417 =========== ===========
See notes to financial statements
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 STATEMENTS OF OPERATIONS For the Three Months Ended March 31, --------------------------- 1998 1997 ---------- ---------- Rental Revenue ............................... $2,590,545 $2,356,528 ---------- ---------- Costs and Expenses: Operating expenses ...................... 836,815 872,018 Depreciation and amortization ........... 329,293 309,935 Partnership management fee .............. 227,043 227,043 Administrative expenses ................. 225,750 202,260 Property management fee ................. 76,584 69,069 ---------- ---------- 1,695,485 1,680,325 ---------- ---------- Income before interest and other income ...... 895,060 676,203 Interest income ......................... 26,201 42,666 Other income ............................ 3,200 15,290 ---------- ---------- Net income ................................... $ 924,461 $ 734,159 ========== ========== Net income attributable to: Limited partners ........................ $ 878,238 $ 697,451 General partners ........................ 46,223 36,708 ---------- ---------- Net income ................................... $ 924,461 $ 734,159 ========== ========== Net income per unit of limited Partnership interest (400,010 units outstanding) ............................ $ 2.20 $ 1.74 ========== ==========
See notes to financial statements
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 STATEMENT OF PARTNERS' EQUITY General Limited Partners' Partners' Equity Equity Total ------------ ------------ ------------ Balance, January 1, 1998 ......................... $ 1,873,109 $ 35,570,050 $ 37,443,159 Net income for the three months ended March 31, 1998 ................. 46,223 878,238 924,461 Distributions as a return of capital for the three months ended March 31, 1998 ($.94 per limited partnership unit............................. (19,790) (376,009) (395,799) ------------ ------------ ------------ Balance, March 31, 1998 .......................... $ 1,899,542 $ 36,072,279 $ 37,971,821 ============ ============ ============
See notes to financial statements
INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, ---------------------------- 1998 1997 ----------- ----------- Cash Flows From Operating Activities: Net income .................................. $ 924,461 $ 734,159 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ........... 329,293 309,935 Straight-line adjustment for stepped lease rentals ......................... 1,000 (13,228) Changes in assets and liabilities: Accounts payable and accrued expenses ... 341,097 196,472 Receivables ............................. 33,865 37,728 Due to affiliates ....................... (91,841) (884,348) Other assets ............................ (22,801) (72,855) ----------- ----------- Net cash provided by operating activities ... 1,515,074 307,863 ----------- ----------- Cash Flows From Investing Activities: Improvements to real estate ................. (438,329) (249,772) ----------- ----------- Cash Flows From Financing Activities: Distributions to partners ................... (395,799) (252,638) ----------- ----------- Increase (Decrease) In Cash And Cash Equivalents . 680,946 (194,547) Cash And Cash Equivalents, Beginning of Year ..... 4,350,887 4,870,517 ----------- ----------- Cash And Cash Equivalents, End of Quarter ........ $ 5,031,833 $ 4,675,970 =========== ===========
See notes to financial statements INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 NOTES TO FINANCIAL STATEMENTS l. GENERAL The accompanying financial statements, notes and discussions should be read in conjunction with the financial statements, related notes and discussions contained in the Partnership's annual report on Form 10-K for the year ended December 31, 1997. The financial information contained herein is unaudited; however, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of such financial information have been included. 2. SIGNIFICANT ACCOUNTING POLICIES Impairment of Assets The Partnership evaluates the recoverability of the net carrying value of its real estate and related assets at least annually, and more often if circumstances dictate. If this review indicates that the carrying value of the property may not be recoverable, the Partnership estimates the future cash flows expected to result from the use of the property and its eventual disposition, generally over a five-year holding period. In performing this review, management takes into account, among other things, the existing occupancy, the expected leasing prospects of the property and the economic situation in the region where the property is located. If the sum of the expected future cash flows, undiscounted, is less than the carrying amount of the property, the Partnership recognizes an impairment loss, and reduces the carrying amount of the asset to its estimated fair value. Fair value is the amount at which the asset could be bought or sold in a current transaction between willing parties, that is, other than in a forced or liquidation sale. Management estimates fair value using discounted cash flows or market comparables, as most appropriate for each property. Independent certified appraisers are utilized to assist management, when warranted. Impairment write-downs recorded by the Partnership do not affect the tax basis of the assets and are not included in the determination of taxable income or loss. Because the cash flows used to evaluate the recoverability of the assets and their fair values are based upon projections of future economic events, such as property occupancy rates, rental rates, operating cost inflation and market capitalization rates, the amounts ultimately realized at disposition may differ materially from the net carrying values at the balance sheet dates. The cash flows and market comparables used in this process are based on good faith estimates and INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 NOTES TO FINANCIAL STATEMENTS 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) assumptions developed by management. Unanticipated events and circumstances may occur and some assumptions may not materialize; therefore, actual results may materially vary from the estimates. The Partnership may in the future provide additional write-downs, which could be material, if real estate markets or local economic conditions change. Certain reclassifications were made to the prior year financial statements in order to conform them to the current period presentation. Results of operations for the three months ended March 31, 1998 are not necessarily indicative of the results to be expected for the entire year. 3. CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES The Managing General Partner of the Partnership, Resources High Equity, Inc. is a wholly-owned subsidiary of Presidio Capital Corp., ("Presidio"). Presidio AGP Corp., which is a wholly-owned subsidiary of Presidio is the Associate General Partner (together with the Managing General Partner, the "General Partners"). The General Partners and affiliates of the General Partners are also engaged in businesses related to the acquisition and operation of real estate. Presidio is also the parent of other corporations that are or may in the future be engaged in businesses that may be in competition with the Partnership. Accordingly, conflicts of interest may arise between the Partnership and such other businesses. The Partnership has a property management services agreement with Resources Supervisory Management Corp. ("Resources Supervisory"), an affiliate of the General Partners, to perform certain functions relating to the management of the properties of the Partnership. A portion of the property management fees were paid to unaffiliated management companies which are engaged for the purpose of performing the management functions for certain properties. For the quarters ended March 31, 1998 and 1997, Resources Supervisory was entitled to receive $76,584 and $69,069 respectively, of which $65,229 and $53,839 was paid to unaffiliated management companies, respectively. For the administration of the Partnership, the Managing General Partner is entitled to receive reimbursement of expenses up to a maximum of $150,000 per year. For each of the quarters ended March 31, 1998 and 1997, the Managing General Partner was entitled to receive $37,500. For managing the affairs of the Partnership, the Managing General Partner is entitled to receive an annual partnership management fee equal to 1.05% of the amount of original gross proceeds paid or allocable to the acquisition of property by the Partnership. For each of the quarters ended March 31, 1998 and 1997, the Managing General Partner was entitled to receive $227,043. INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 NOTES TO FINANCIAL STATEMENTS 3. CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES (CONTINUED) The General Partners are allocated 5% of the net income of the Partnership, which amounted to $46,223 and $36,708 for the quarters ended March 31, 1998 and 1997, respectively. They are also entitled to receive 5% of distributions, which amounted to $19,790 and $15,790 for the quarters ended March 31, 1998 and 1997, respectively. During the liquidation stage of the Partnership, the Managing General Partner or an affiliate may be entitled to receive certain fees, which are subordinated to the limited partners receiving their original invested capital and certain specified minimum returns on their investment. All fees received by the General Partners are subject to certain limitations as set forth in the Partnership Agreement. From July 1996 through May 1, 1998, Millenium Funding II Corp., a wholly owned indirect subsidiary of Presidio, purchased 39,123 units of the Partnership from various limited partners, which represents approximately 9.8% of the outstanding limited partnership units of the Partnership. Pursuant to an agreement dated as of March 6, 1998 among Presidio Capital Corp., American Real Estate Holding, L.P. and Olympia Investors L.P. (the "Purchaser"), on March 12, 1998, the Purchaser commenced a tender offer to purchase up to 40% of the outstanding units of limited partnership interest at a purchase price of $95.00 per unit. 4. REAL ESTATE The following table is a summary of the Partnership's real estate as of:
March 31, December 31, 1998 1997 ------------ ------------ Land ......................... $ 11,056,966 $ 11,056,966 Building and improvements .... 37,223,037 36,784,708 ------------ ------------ 48,280,003 47,841,674 Less: Accumulated depreciation (15,069,067) (14,807,964) ------------ ------------ $ 33,210,936 $ 33,033,710 ============ ============
No write-downs for impairment were recorded for the three months ended March 31, 1998 or 1997. INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 NOTES TO FINANCIAL STATEMENTS 5. DISTRIBUTIONS PAYABLE
March 31, December 31, 1998 1997 -------- -------- Limited partners ($.94 per unit) $376,009 $376,009 General partners ............... 19,790 19,790 -------- -------- $395,799 $395,799 ======== ========
Such distributions were paid in the quarters subsequent to March 31, 1998 and December 31, 1997, respectively. 6. DUE TO AFFILIATES
March 31, December 31, 1998 1997 -------- -------- Partnership management fee ..................... $227,043 $227,044 Reorganization and litigation cost reimbursement (Note 7) ....................................... 210,000 210,000 Property management fee ........................ 11,355 103,195 Non-accountable expense reimbursement .......... 37,500 37,500 -------- -------- $485,898 $577,739 ======== ========
Such amounts were paid in the quarters subsequent to March 31, 1998 and December 31, 1997, respectively. 7. COMMITMENTS AND CONTINGENCIES On or about May 11, 1993 High Equity Partners L.P. - Series 86 ("HEP-86"), an affiliated partnership, was advised of the existence of an action (the "California Action") in which a complaint (the "HEP Complaint") was filed in the Superior Court for the State of California for the County of Los Angeles (the "Court") on behalf of a purported class consisting of all of the purchasers of limited partnership interests in the Partnership. On April 7, 1994 the plaintiffs were granted leave to file an amended complaint (the "Amended Complaint") on behalf of a class consisting of all the purchasers of limited partnership interest in HEP-86, the Partnership, and High Equity Partners L.P. - Series 88 ("HEP-88"), another affiliated partnership. INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 NOTES TO FINANCIAL STATEMENTS 7. COMMITMENTS AND CONTINGENCIES (CONTINUED) On November 30, 1995, after the Court preliminarily approved a settlement of the California Action but ultimately declined to grant final approval and after the Court granted motions to intervene, the original and intervening plaintiffs filed a Consolidated Class and Derivative Action Complaint (the "Consolidated Complaint") against the managing general partner of HEP-85 and HEP-88 and the Investment General Partner of HEP-86; the Administrative General Partner of HEP-86 (the "General Partners"); a subsidiary of the indirect corporate parent of the General Partners; and the indirect corporate parent of the General Partners. The Consolidated Complaint alleged various state law class and derivative claims, including claims for breach of fiduciary duties; breach of contract; unfair and fraudulent business practices under California Bus. & Prof. Code Sec. 17200; negligence; dissolution, accounting and receivership; fraud; and negligent misrepresentation. The Consolidated Complaint alleged, among other things, that the General Partners caused a waste of the HEP partnership assets by collecting management fees in lieu of pursuing a strategy to maximize the value of the investments owned by the limited partners; that the General Partners breached their duty of loyalty and due care to the limited partners by expropriating management fees from the partnerships without trying to run the HEP partnerships for the purposes for which they are intended; that the General Partners acted improperly to enrich themselves in their position of control over the HEP partnerships and that their actions prevented non-affiliated entities from making and completing tender offers to purchase units in the HEP partnership; that by refusing to seek the sale of the HEP partnerships' properties, the General Partners diminished the value of the limited partners' equity in the HEP partnerships; that the General Partners took a heavily overvalued partnership asset management fee; and that limited partnership units were sold and marketed through the use of false and misleading statements. The Court entered an order on January 14, 1997 rejecting the settlement and concluding that there had not been an adequate showing that the settlement was fair and reasonable. On February 24, 1997, the Court granted the request of one plaintiffs' law firm to withdraw as class counsel. Thereafter, in June 1997, the plaintiffs again amended their complaint (the "Second Amended Complaint"). The Seconded Amended Complaint asserts substantially the same claims as the Consolidated Complaint, except that it no longer contains causes of action for fraud, for negligent misrepresentation, or for negligence. The defendants served answers denying the allegations and asserting numerous affirmative defenses. In February 1998, the Court certified three plaintiff classes consisting of the current unit holders in each of the three HEP partnerships. On March 11, 1998, the Court stayed the California Action temporarily to permit the parties to engage in renewed settlement discussions. INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 NOTES TO FINANCIAL STATEMENTS 7. COMMITMENTS AND CONTINGENCIES (CONTINUED) The Limited Partnership Agreement provides for indemnification of the General Partners and their affiliates in certain circumstances. The Partnership has agreed to reimburse the General Partners for their actual costs incurred in defending this litigation and the costs of preparing settlement materials. Through March 31, 1998, the General Partners had billed the Partnership a total of $1,034,510 for these costs, of which $824,510 was paid. The General Partners believe that each of the claims asserted in the Second Amended Complaint are meritless and intend to continue to vigorously defend the California Action. It is impossible at this time to predict what the defense of the California Action will cost, the Partnership's financial exposure as a result of the indemnification agreement discussed above, and whether the costs of defending could adversely affect the Managing General Partner's ability to perform its obligations to the Partnership. On February 6,1998, Everest Investors 8, LLC ("Everest") commenced an action in the Superior Court of the State of California for the County of Los Angeles (Case No. BC 185554), against, among others, the HEP partnerships, Resources Pension Shares 5 LP (an affiliated partnership), the general partners of each of the partnerships, and DCC Securities Corp. In the action, Everest alleged, among other things, that the partnerships and the general partners breached the provisions of the applicable partnership agreements by refusing to recognize transfers to Everest of limited partnership units purportedly acquired pursuant to tender offers that had been made by Everest (the "Everest Tender Units"). Everest sought injunctive relief (a) directing the recognition of transfers to Everest of the Everest Tender Units and the admission of Everest as a limited partner with respect to the Everest Tender Units and (b) enjoining the transfer of the Everest Tender Units to any either party. Everest seeks damages, including punitive damages, for alleged breach of contract, defamation and intentional interference with contractual relations. Everest's motion for a temporary restraining order was denied on February 6, 1998. A hearing on Everest's application for a preliminary injunction had been scheduled for February 26, however, on February 20, 1998, Everest asked the Court to take its application off calendar. The defendants served answers denying the allegations and asserting numerous affirmative defenses. Merits discovery has commenced. The Partnerships and the General Partners believe that Everest claims are without merit and intend to vigorously contest the action. On March 27, 1998, Everest commenced an action in the United States District Court for the Central District of California against, among others, the general partners of the HEP Partnerships. In the action, Everest alleged, among other things, various violations of the Williams Act Section 14(d) of the Securities Exchange Act of 1934 in connection with the general partners' refusal to recognize transfers to Everest of limited partnership units purportedly acquired pursuant to the Everest tender offers and the letters sent by the general partners to the INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 NOTES TO FINANCIAL STATEMENTS 7. COMMITMENTS AND CONTINGENCIES (CONTINUED) limited partners advising them of the general partners' determination that the Everest tender offers violated applicable securities laws. The general partners believe that Everest's claims are without merit and intend to vigorously contest the action. INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES Working capital reserves are temporarily invested in short-term instruments and, together with cash flow from operations, are expected to be sufficient to fund future capital improvements to the Partnership's properties. As of March 31, 1998, total working capital reserves amounted to approximately $3,426,000. The Partnership intends to distribute to its partners less than all of its future cash flow from operations in order to assure adequate reserves for capital improvements and capitalized lease procurement costs. During the three months ended March 31, 1998, cash and cash equivalents increased $680,946 as a result of cash provided by operations in excess of capital expenditures and distributions to partners. The Partnership's primary source of funds is cash flow from the operation of its properties, principally rents received from tenants, which amounted to $1,515,074 for the three months ended March 31, 1998. The Partnership used $438,329 for capital expenditures related to capital and tenant improvements to the properties and $395,799 for distributions to partners for the three months ended March 31, 1998. The Partnership expects to continue to utilize a portion of its cash flow from operations to pay for various capital and tenant improvements to the properties and leasing commissions. Capital and tenant improvements and leasing commissions may in the future exceed the Partnership's cash flow from operations. In that event, the Partnership would utilize the remaining working capital reserves, reduce distributions, or sell one or more properties. Except as discussed above, management is not aware of any other trends, events, commitments or uncertainties that will have a significant impact on liquidity. RESULTS OF OPERATIONS The Partnership experienced an increase in net income for the three months ended March 31, 1998 compared to the same period in the prior year due primarily to higher rental revenues, partially offset by higher costs and expenses and lower interest and other income during 1998. Rental revenues increased primarily at Southport during the three ended March 31, 1998 compared to 1997, due to higher percentage rents collected during 1998 as a result of higher sales volume. This increase was partially offset by lower rental revenues at Westbrook, primarily due to lower occupancy rates in 1998 as compared to the same period in 1997. Costs and expenses increased during the three months ended March 31, 1998 compared to the same period in 1997, primarily due to increases in administrative expenses and depreciation expense, partially offset by a decrease in operating expenses. Administrative expenses increased due to higher legal and accounting fees during 1998 related to ongoing litigation and the HEP settlement and depreciation increased due to the significant capital additions in 1997. Operating expenses decreased during the first three months of 1998 due to lower repair and maintenance costs at various properties. INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Interest income decreased due to lower cash balances during the three ended March 31, 1998 compared to the same period in 1997. Other income decreased during the three months ended March 31, 1998 compared to the same period in 1997 due to fewer investor transfers. Inflation is not expected to have a material impact on the Partnership's operations or financial position. Legal Proceedings The Partnership is a party to certain litigation. See Note 7 to the financial statements for a description thereof. INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 Part II. - Other Information Item 1 - Legal Proceedings (a) See Management's Discussion and Analysis of Financial Condition and Results of Operations and Notes to Financial Statements - Note 7 which is herein incorporated by reference. Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits: There were no exhibits filed. (b) Reports on Form 8-K: None INTEGRATED RESOURCES HIGH EQUITY PARTNERS, SERIES 85 FORM 10-Q - MARCH 31, 1998 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Integrated Resources High Equity Partners, Series 85, A California Limited Partnership By: Resources High Equity, Inc., Managing General Partner Dated: May 12, 1998 By: /S/ Richard Sabella ------------------- Richard Sabella President (Duly Authorized Officer) Dated: May 12, 1998 By: /S/ Lawrence Schachter ---------------------- Lawrence Schachter Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) EX-27 2
5 The schedule contains summary information extracted from the financial statements of the March 31, 1998 Form 10-Q of Integrated Resources High Equity Partners, Series 85 and is qualified in its entirety by reference to such financial statements. 3-MOS DEC-31-1998 MAR-31-1998 5,031,833 0 148,703 0 0 0 0 0 40,378,335 0 0 0 0 0 37,971,821 40,378,335 0 2,590,545 0 836,815 858,670 0 0 924,461 0 924,461 0 0 0 924,461 0 0
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