-----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, ByECV8PA8GMgpwHMoTc4Z/rEiTcSQZFt63UpQHji68ExP1VecIuNZFE9N0C4+BOz XNnJEmUoaR9r4/9x+2nPAg== 0000731245-99-000002.txt : 19990303 0000731245-99-000002.hdr.sgml : 19990303 ACCESSION NUMBER: 0000731245-99-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990301 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRESIDENTIAL REALTY CORP/DE/ CENTRAL INDEX KEY: 0000731245 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 131954619 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08594 FILM NUMBER: 99555273 BUSINESS ADDRESS: STREET 1: 180 S BROADWAY CITY: WHITE PLAINS STATE: NY ZIP: 10605 BUSINESS PHONE: 9149481300 MAIL ADDRESS: STREET 1: 180 SOUTH BROADWAY CITY: WHITE PLAINS STATE: NY ZIP: 10605 8-K 1 CURRENT REPORT 3/1/1999 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) March 1, 1999 -------------------- Presidential Realty Corporation - --------------------------------------------------------------------- (Exact name of registrant as specified in charter) DELAWARE 1-8594 13-1954619 - ---------------------------- ------------ ------------ (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification Number) 180 South Broadway, White Plains, New York 10605 - ------------------------------------------- ------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (914) 948-1300 -------------- No change since last Report - ------------------------------------------------- (Former name or former address, if changed since last report) Item 5. Other Events. ------------- On February 22, 1999, Presidential Realty Corporation consummated the sale of its First and Second Mortgage Notes (excluding a $4,000,000 portion of the Second Mortgage Note, which it retained) secured by unsold condominium units at Fairfield Towers Apartments in Brooklyn, New York. The press release dated February 26, 1999 attached as Exhibit 99 describes the transaction. As stated in the press release, Presidential received approximately $10,275,000 from the transaction, after repayment of its loan from Fleet Bank and expenses related to the transaction. Out of this amount, Presidential expects to pay approximately $1,700,000 of tax on the capital gain resulting from the sale and to invest the balance of approximately $8,575,000 in rental apartment properties. In addition, Presidential will receive interest on its $4,000,000 retained note in the amount of $385,000 per annum for the first three years and $420,000 per annum for the remaining seven years of the term of the Note. During the nine months ended September 30, 1998 and the year ended December 31, 1997, Presidential reported income (net of deductions of interest and amortization of loan acquisition costs on the Fleet note payable) of $750,939 and $1,000,695, respectively, from the First and Second Mortgage Notes. On a cash flow basis, Presidential received in the nine months ended September 30, 1998 and in the year ended December 31, 1997, $561,498 and $753,758, respectively, from this investment, net of the Fleet expenses. Item 7. Financial Statements, Pro Forma Financial Information and --------------------------------------------------------- Exhibits. --------- (c) Exhibits: 99. Press Release of Presidential Realty Corporation dated February 26, 1999. Page 2 of 6 pages 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 hereunto duly authorized. Date: March 1, 1999 PRESIDENTIAL REALTY CORPORATION By: Jeffrey F. Joseph ---------------------------- Jeffrey F. Joseph President Page 3 of 6 pages INDEX OF EXHIBITS ----------------- Exhibit 99 Press Release dated February 26, 1999 Page 5 Page 4 of 6 pages EX-99 2 PRESS RELEASE DATED FEBRUARY 26, 1999 Exhibit 99 PRESIDENTIAL FOR IMMEDIATE RELEASE REALTY NEWS White Plains, New York February 26, 1999 CORPORATION 180 South Broadway, White Plains, N.Y. 10605 - (914) 948-1300 Jeffrey Joseph, President of Presidential Realty Corporation, a real estate investment trust whose shares are listed on the American Stock Exchange (PDLA and PDLB), announced today that Presidential had completed the sale of substantially all of its first and second mortgage notes receivable secured by 990 Sponsor owned condominium units at the Fairfield Towers apartment property in Brooklyn, New York. The First Mortgage Note, which had an outstanding principal balance of $17,002,695, was acquired by Presidential in October, 1996 at a discount of $3,500,000. The Second Mortgage Note, which had an outstanding principal balance of $14,206,895, was obtained by Presidential when it sold the Fairfield Towers apartment property in 1984. Presidential retained a $4,000,000 interest in the Second Mortgage Note. The aggregate purchase price for the First Mortgage Note and the Second Mortgage Note (excluding the $4,000,000 interest retained by Presidential) was $21,350,000. The Second Mortgage Note, which was in default, had approximately $11,000,000 of interest and other charges which were deferred and payable out of the proceeds of sales of condominium units, but only after the First Mortgage was repaid in full. In addition, at the time of the sale, there were approximately $3,000,000 of past due real estate taxes payable with respect to the condominium units, which were paid by the purchaser. In connection with this transaction, the $4,000,000 portion of the Second Mortgage Note retained by Presidential was modified to provide for a ten-year maturity date and interest at the rate of 9.625% for the first three years and at 10.5% for the remaining seven years. To secure this obligation, Presidential obtained subordinate security interests in three apartment properties located in New Jersey (having an estimated equity value of approximately $7,000,000) as collateral for the Note. In connection with the sale, Presidential repaid the $10,195,442 outstanding principal balance of its note payable to Fleet Bank, which had been secured by Presidential's interest in the First Mortgage Note. As a result of the transaction, Presidential will, for financial reporting purposes, recognize a gain on sale (before taxes) of approximately $7,800,000. Page 5 of 6 pages Exhibit 99 After payment of the Fleet loan and expenses related to the transaction, but before payment of any income tax on the capital gain, Presidential will retain approximately $10,275,000 from the sale. Presidential expects to pay approximately $1,700,000 of taxes on the retained capital gain and invest the balance in rental apartment properties. In addition, Presidential will receive interest on its $4,000,000 retained Note in the amount of $385,000 per annum for the first three years and $420,000 per annum for the remaining seven years of the term. *************** For further information contact: Jeffrey F. Joseph, President Presidential Realty Corporation at the above address and telephone number Page 6 of 6 pages -----END PRIVACY-ENHANCED MESSAGE-----