-----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, QA2yno9xB8BUZfGD/RzfqY5TCtQ31nkFCd7NrLD/bC/ik9Y914Zo8v+vKDh0aXT2 kx8RP76dcHG812OU+jIaqA== 0000788955-95-000003.txt : 19951119 0000788955-95-000003.hdr.sgml : 19951119 ACCESSION NUMBER: 0000788955-95-000003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES PARTNERS XIV CENTRAL INDEX KEY: 0000759859 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953959771 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-14284 FILM NUMBER: 95589361 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: P.O. BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 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 0-14248 ANGELES PARTNERS XIV (Exact name of small business issuer as specified in its charter) California 95-3959771 (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 PARTNERS XIV BALANCE SHEET (Unaudited)
September 30, 1995 Assets Cash: Unrestricted $ 315,791 Restricted--tenant security deposits 104,366 Accounts receivable, (net of allowance for doubtful accounts of $42,383) 28,692 Escrows deposits for taxes 410,443 Restricted escrows 278,884 Other assets 897,649 Investment properties: Land $ 4,164,166 Buildings and related personal 48,710,446 52,874,612 Less accumulated depreciation (26,300,395) 26,574,217 $ 28,610,042 Liabilities and Partners' Deficit Liabilities Accounts payable $ 71,997 Tenant security deposits 139,765 Accrued taxes 526,795 Accrued interest 3,450,458 Due to affiliates 713,956 Other liabilities 192,315 Notes payable, including $13,229,636 in default 48,219,514 Partners' Deficit General partners $ (630,406) Limited partners (44,139 units issued and outstanding) (24,074,352) (24,704,758) $ 28,610,042
[FN] See Accompanying Notes to Financial Statements b) ANGELES PARTNERS XIV STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, 1995 1994 1995 1994 Revenues: Rental income $ 1,979,341 $ 2,154,414 $ 5,956,149 $ 6,640,311 Other income 42,442 15,221 180,726 141,761 Total revenue 2,021,783 2,169,635 6,136,875 6,782,072 Expenses: Operating 306,551 445,888 1,235,771 1,481,176 General and administrative 69,506 52,032 210,339 275,679 Property management fees 92,413 72,586 271,844 307,073 Maintenance 169,333 168,266 455,077 524,919 Depreciation 694,537 808,380 2,138,748 2,402,776 Amortization 52,336 53,419 106,555 145,184 Interest 1,580,893 1,507,535 4,488,614 4,988,269 Property taxes 109,058 144,176 324,526 509,041 Bad debt 20,712 -- 20,712 -- Tenant reimbursements (10,292) (18,392) (30,380) (36,639) Total expenses 3,085,047 3,233,890 9,221,806 10,597,478 Loss before gain on sale of investment property, loss on transfer of property in foreclosure and loss on disposoal of property (1,063,264) (1,064,255) (3,084,931) (3,815,406) Gain on sale of investment property 78,078 -- 78,078 601,633 Loss on transfer of property in foreclosure -- -- -- (570,258) Loss on disposal of property -- (33,203) -- (33,203) Loss before extraordinary item (985,186) (1,097,458) (3,006,853) (3,817,234) Extraordinary item - gain on early extinguishment of debt -- (225,000) -- 2,243,515 Net loss $ (985,186) $(1,322,458) $(3,006,853) $(1,573,719) Net loss allocated to general partners (1%) $ (9,852) $ (13,225) $ (30,069) $ (15,737) Net loss allocated to limited partners (99%) (975,334) (1,309,233) (2,976,784) (1,557,982) Net loss $ (985,186) $(1,322,458) $(3,006,853) $(1,573,719)
[FN] See Accompanying Notes to Financial Statements ANGELES PARTNERS XIV STATEMENTS OF OPERATIONS (Continued) (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, 1995 1994 1995 1994 Per limited partnership unit: Loss before extraordinary item $ (22.10) $ (24.48) $ (67.44) $ (85.13) Extraordinary item -- (5.02) -- 50.04 Net loss $ (22.10) $ (29.50) $ (67.44) $ (35.09)
[FN] See Accompanying Notes to Financial Statements c) ANGELES PARTNERS XIV STATEMENT OF CHANGES IN PARTNERS' DEFICIT (Unaudited)
Limited Partnership General Limited Units Partners Partners Total Original capital contributions 44,390 $ 1,000 $ 44,390,000 $ 44,391,000 Partners' deficit at December 31, 1994 44,139 $(600,337) $(21,097,568) $(21,697,905) Net loss for the nine months ended September 30, 1995 -- (30,069) (2,976,784) (3,006,853) Partners' deficit at September 30, 1995 44,139 $(630,406) $(24,074,352) $(24,704,758)
[FN] See Accompanying Notes to Financial Statements d) ANGELES PARTNERS XIV STATEMENT OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, 1995 1994 Cash flows from operating activities: Net loss $(3,006,853) $(1,573,719) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 2,138,748 2,402,776 Amortization of discounts, loan costs, and leasing commissions 211,191 326,262 Gain on early extinguishment of debt -- (2,243,515) Gain on sale of investment property (78,078) (601,633) Loss on disposal of property -- 33,203 Loss on transfer of property in forecloure -- 570,258 Bad debt 20,712 -- Change in accounts: Restricted cash (4,453) (8,959) Accounts receivable (1,761) (61,532) Escrows for taxes (31,892) 312,346 Other assets (130,768) (218,902) Accounts payable (17,626) 36,087 Tenant security deposit liabilities (32,569) 7,963 Accrued taxes (23,779) (16,935) Accrued interest 1,990,206 -- Due to affiliates 129,541 -- Other liabilities 6,826 2,508,273 Net cash provided by operating activities 1,169,445 1,471,973 Cash flows from investing activities: Property improvements and replacements (248,141) (597,748) Proceeds from sale of investment property 4,095,964 6,129,897 Deposits to restricted escrows (89,906) (80,915) Withdrawals from restricted escrows 83,639 65,697 Net cash provided by investing activities 3,841,556 5,516,931 Cash flows from financing activities: Payments on mortgage notes payable (770,622) (1,109,709) Repayments of loans (4,089,544) (6,101,222) Cash payment on foreclosure -- (225,000) Loan cost (67,000) -- Cash distributions to General Partner -- (265) Additional borrowings 49,141 -- Net cash used in financing activities (4,878,025) (7,436,196)
[FN] See Accompanying Notes to Financial Statements ANGELES PARTNERS XIV STATEMENT OF CASH FLOWS (Continued) (Unaudited)
Nine Months Ended September 30, 1995 1994 Net increase (decrease) in cash $ 132,976 $ (447,292) Cash at beginning of period 182,815 513,646 Cash at end of period $ 315,791 $ 66,354 Supplemental disclosure of cash flow information: Cash paid for interest $2,306,753 $2,285,816 Interest on notes transferred to notes payable $ 977,556 $1,229,752 Foreclosures: During the nine months ended September 30, 1994, Building 57 of the Dayton Industrial Complex was foreclosed upon by the lender. In connection with the foreclosure, the following accounts were adjusted by the following non-cash amounts: Other assets $ (11,850) Investment properties (1,928,358) Interest payable 576,808 Mortgages payable 2,325,990
[FN] See Accompanying Notes to Financial Statements e) ANGELES PARTNERS XIV NOTES TO FINANCIAL STATEMENTS (Unaudited) Note A - Going Concern The accompanying unaudited financial statements have been prepared assuming the Partnership will continue as a going concern. The Partnership continues to suffer from inadequate liquidity and is in default on certain of its debt obligations due principally to the inability to make payments as due. Limited sources of additional financing have been identified by the Partnership. The total amount of debt in default at September 30, 1995, is $13,229,636. Fox Crest Apartments is in default on its non-recourse first mortgage in the amount of $6,574,382 due to its maturity in August 1994. The lender has offered to refinance the debt and the Partnership is negotiating with the lender for terms with a lower interest rate. The Dayton Industrial Complex contains seven buildings. The Partnership is in default on two of its non-recourse first mortgages in the amount of $2,155,254 due to delinquent taxes of approximately $46,000. The Partnership plans to pay these taxes during 1995. The Partnership is investigating the possibility of selling some or all of the buildings at Dayton Industrial Complex. The Partnership sold Building 47 of the Dayton Industrial Complex on August 31, 1995. Proceeds from the sale were $4,095,964 which were used to payoff the first mortgage and pay-down the second mortgage. The Partnership recognized a gain on the sale of $78,078. The unsecured indebtedness to Angeles Mortgage Investment Trust ("AMIT") in the amount of $4,500,000 is in default due to non-payment of interest. The lender is in the process of initiating negotiations to amend these notes to require interest only payments based on available cash flow, as defined. The mortgage secured by Waterford Square Apartments and guaranteed by HUD is current and is not in default. As a result of the above, there is substantial doubt about the Partnership's ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classifications of liabilities that may result from these uncertainties. Note B - 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 C - 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 expenses owed to the Managing General Partner and affiliates during the nine months ended September 30, 1995 and 1994 were paid or accrued: 1995 1994 Property management fees $271,844 $307,073 Reimbursement for services of affiliates, (Total of $713,956 and $531,687 accrued at September 30, 1995 and 1994, respectively) 129,541 228,693 Marketing services 2,546 1,607 Note C - Transactions with Affiliated Parties (continued) 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 loans 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. These working capital loans funded the Partnership's operating deficits in prior years. Total indebtedness was $4,576,493 at September 30, 1995, with monthly interest accruing at the prime rate plus two percent. Interest is to be paid based on excess cash flow, as defined. Principal is to be paid the earlier of i) the availability of funds, ii) the sale of one or more properties owned by the Partnership, or iii) November 25, 1997. Total interest expense for this loan was $370,047 and $306,053 for the nine months ended September 30, 1995 and 1994, respectively. Interest of $1,194,857 was accrued at September 30, 1995. AMIT currently provides notes payable to the Partnership and secondary financing on one of the Partnership's investment properties. Total indebtedness of $4,500,000 was in default at September 30, 1995. Total interest expense on this financing was $672,183 and $444,125 for the nine months ended September 30, 1995 and 1994, respectively. Accrued interest was $2,068,565 at September 30, 1995. Note C - Transactions with Affiliated Parties (continued) 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 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. As part of a settlement of certain disputes with AMIT, 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 will 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 these matters, MAE GP will deliver 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. Note C - Transactions with Affiliated Parties (continued) The Partnership has agreed to pay Miller Valentine Realty ("MV") property management fees, leasing commissions, and financing fees and sales commissions upon the refinancing or sale of the properties. The Partnership will receive the first $3,000,000 of excess cash from operations, refinancing or sales of the properties. Thereafter, the agreement provides that MV shall receive as incentive for providing property management, leasing and asset management services to the Partnership, two-thirds of the next $12,000,000 of excess cash proceeds generated by the properties. Cash in excess of $15,000,000 shall be shared equally by MV and the Partnership. The agreement contemplates that the properties will be sold at an opportune time but no later than 10 years after commencement of the agreements (March 2, 1992). In addition, the agreement contains an option for MV to buy the properties five years after the commencement date of the agreement. The Managing General Partner does not anticipate that there will be any proceeds available to the Partnership. Should the Partnership elect not to sell, it would be obligated to purchase MV's incentive interest based on the offered purchase price. The Partnership intends to maintain ownership of the Dayton properties only as long as they are under the management of MV. There is no certainty as to the future of the Dayton properties otherwise. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of two apartment complexes and one commercial property. 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 Waterford Square Apartments Huntsville, Alabama (1) 87% 84% Fox Crest Apartments Waukegan, Illinois 97% 95% Dayton Industrial Complex Dayton, Ohio (2) 86% 94% (1) This market area has been adversely affected by lay-offs in the aerospace and defense industries, which are both major employers in the area. (2) This investment property has been adversely affected by build-up of commercial space in the area. The Partnership realized a net loss of $3,006,853 for the nine months ended September 30, 1995, and a net loss of $1,573,719 for the nine months ended September 30, 1994. The Partnership realized a net loss of $985,186 for the three months ended September 30, 1995, and a net loss of $1,322,458 for the three months ended September 30, 1994. The increased loss for the nine months ended September 30, 1995 can be attributed to a $601,633 gain on the sale of Building 64 and 66 of the Dayton Industrial Complex and a $2,243,515 gain on early extinguishment of debt relating to the sale and the foreclosure of Building 57 of the Dayton Industrial Complex during the nine months ended September 30, 1994 (see discussion below). The Partnership sold Building 47 of the Dayton Industrial Complex on August 31, 1995, Buildings 64 and 66 of the Dayton Industrial Complex on February 18, 1994, and Building 54 of the Dayton Industrial Complex on December 28, 1994. Also, on June 18, 1994, the Partnership lost Building 57 of the Dayton Industrial Complex through foreclosure. As a result of these transactions, the Partnership realized decreases in rental revenues and the following expenses for the three and nine months ended September 30, 1995, versus the three and nine months ended September 30, 1994: operating, property management fees, maintenance, depreciation, amortization, interest and property taxes. General and administrative expense decreased primarily due to a decrease in reimbursements for partnership accounting, investor relations and asset management services. Bad debt expense relates to past-due rents from tenants of the Dayton Industrial Complex which have been deemed uncollectible. The increase in other income during the three and nine months ended September 30, 1995, as compared to the three and nine months ended September 30, 1994, is a result of increased lease cancellation fees, deposits forfeited and other miscellaneous fees and collections associated with the Foxcrest investment property. In addition, the Partnership received a $37,500 sales commission relating to the sale of Building 54. As mentioned previously, the Partnership sold Building 47 of the Dayton Industrial Complex on August 31, 1995 and Buildings 64 and 66 of the Dayton Industrial Complex on February 18, 1994. In addition, on June 18, 1994, the Partnership lost Building 57 of the Dayton Industrial Complex through foreclosure. Proceeds from the sale of Building 47 were $4,095,964 which were used to pay off the first mortgage and pay down the second mortgage. The Partnership recognized a $78,078 gain on the sale. The net gain on the sale of Buildings 64 and 66 amounted to $1,537,300 of which $601,633 represented a net gain on the transfer of property in the sale and $935,667 represented a net gain on extinguishment of the related debt. The net gain on the foreclosure of Building 57 amounted to $737,590. Finally, at September 30, 1994, several roofs at the Fox Crest investment property were replaced. The Partnership realized a $33,203 loss on the disposal of property as a result of the write-off of the roofs that were not fully depreciated. 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 $315,791 compared to $66,354 at September 30, 1994. Cash provided by operating activities decreased as a result of an increased net loss, increased escrows for taxes and a decrease in accounts payable. Cash provided by investing activities decreased due to decreased proceeds from the sale of investment properties. Offsetting the decrease in cash flows provided by investing activities was a decrease in cash used in financing activities. This decrease is related to the repayments of loans on the sold properties. The Partnership continues to suffer from inadequate liquidity. In addition, there are no identified capital resources available to the Partnership, except those funds that Miller-Valentine Realty has agreed to lend to the Partnership relating to the Dayton Industrial Complex (see discussion below). As a result, the Partnership has not had cash available to perform the substantial rehabilitation necessary at each of the investment properties. As noted above, the Partnership had one property sold in 1995, one property foreclosed in 1994 and three properties sold in 1994. Fox Crest Apartments is in default on its non-recourse first mortgage in the amount of $6,574,382 due to its maturity in August 1994. The lender has offered to refinance the debt and the Partnership is negotiating with the lender for terms with a lower interest rate. The Dayton Industrial Complex contains seven buildings. The Partnership is in default on two of its non-recourse first mortgages in the amount of $2,155,254 due to delinquent taxes of approximately $46,000. The Partnership plans to pay these taxes during 1995. The Partnership is investigating the possibility of selling some or all of the buildings at Dayton Industrial Complex. The unsecured indebtedness to Angeles Mortgage Investment Trust ("AMIT") in the amount of $4,500,000 is in default due to non-payment of interest. The lender is in the process of initiating negotiations to amend these notes to require interest only payments based on available cash flow. The mortgage secured by Waterford Square Apartments and guaranteed by HUD is current and is not in default. 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 declined to vote these shares. Since that date, MAE GP voted its shares at the 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. As part of a settlement of certain disputes with AMIT, 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 will 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 these 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 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. In March 1992, the Partnership entered into an incentive management agreement with Miller-Valentine Realty, an Ohio corporation ("MV"). An affiliate of MV was the original seller of the Dayton Industrial Complex to the Partnership. Pursuant to the agreement, MV was appointed exclusive leasing agent, property manager and sales agent for these properties. As part of the agreement, MV secured the agreement of its affiliate which holds the secured mortgages on these properties to change their terms to reflect that interest on such debt will be paid only to the extent of the properties' cash flows, after payment of operating expenses and senior financing costs. Interest on the second mortgages that is not paid on a current basis will continue to accrue and will be due upon sale or refinancing of the properties. Additionally, MV has agreed to lend the Partnership up to $1,000,000 relating to the Dayton Industrial Complex for working capital requirements. The balance of such loan proceeds will be used for capital improvements at the properties, as and when deemed appropriate and necessary by MV; payment of tenant improvements necessary for leasing space; and to cover any shortfalls in operating expenses or debt service payments. The balance under this arrangement is $328,635 at September 30, 1995. It is questionable whether MV will fund the remainder. The loan will bear interest at 10% per annum with principal and interest payments deferred until all necessary repairs, expenses and other arrearages have been fully funded and anticipated income from the properties appears sufficient so that all operating expenses, real estate taxes, and debt service can continue to be paid timely. This loan will be secured by the properties, but is nonrecourse to any other assets of the Partnership. MV will also attempt to refinance the properties and has secured the agreement of the holder of the second mortgages on the properties to be subordinate to any such refinancing. The Partnership has agreed to pay MV property management fees, leasing commissions, financing fees and sales commissions upon the refinancing or sale of the properties. The Partnership will receive the first $3,000,000 of excess from operations, refinancing or sales of the properties. Thereafter, the agreement provides that MV shall receive as incentive for providing property management, leasing and asset management services to the Partnership, two-thirds of the next $12,000,000 of excess cash proceeds generated by the properties. Cash in excess of $15,000,000 shall be shared equally by MV and the Partnership. The agreement contemplates that the properties will be sold at an opportune time but no later than 10 years after commencement of the agreement (March 2, 1992). In addition, the agreement contains an option for MV to buy the properties five years after the commencement date of the agreement. Should the Partnership elect not to sell, it would be obligated to purchase MV's incentive interest based on the offered purchase price. The Partnership intends to maintain ownership of the Dayton properties only as long as they are under the management of MV. There is no certainty as to the future of the Dayton properties otherwise. As a result of the above, there is substantial doubt about the Partnership's ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts or classification of liabilities that may result from the outcome of these uncertainties. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS AMIT, an affiliate of the Managing General Partner, made a loan to the Partnership on August 28, 1991, in the amount of $3,000,000, secured by the Partnership's real property known as Fox Crest Apartments, on a non-recourse basis. AMIT now asserts that the loan is recourse by virtue of a certain amendment purportedly entered into as of November 1, 1992, but which the Partnership has been informed and believes was actually executed in December of 1992 ("Note Modification"). The Partnership has been further informed and believes that the amendment may have been executed at the direction of Angeles by an individual in his purported capacity as an officer of the Managing General Partner of the Partnership at a time when such person was not in fact an officer of such entity. Accordingly, the Partnership filed a Proof of Claim in the Angeles bankruptcy proceeding with respect to such purported amendment. Additionally, the Partnership filed a Proof of Claim in the Angeles Funding Corporation and Angeles Real Estate Corporation bankruptcy proceedings on similar grounds. Both Angeles Funding Corporation and Angeles Real Estate Corporation are affiliates of Angeles. Subsequently, Angeles agreed to cooperate with the Partnership in any action commenced by or against them by AMIT asserting that the $3,000,000 obligation owed to AMIT is recourse to the Partnership. Angeles further agreed to waive the attorney-client privilege with respect to any information relating to the Note Modification. Accordingly, the Partnership withdrew its claim on August 9, 1995. The Partnership has been in and continues to have discussions with AMIT regarding resolution of this issue. No agreement has been reached with AMIT at this time. 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 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. As part of a settlement of certain disputes with AMIT, 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 will 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 these 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. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: 10.13 Purchase Agreement - Building 47 of the Dayton Industrial Complex - between the Partnership and Miller-Valentine Partners, dated March 20, 1995, incorporated by reference to Form 8-K dated August 31, 1995. 10.14 Amendment to and Assignment of Purchase Agreement - Building 47 of the Dayton Industrial Complex - between the Partnership, Miller- Valentine Partners and Mid-States Development Company, dated April 27, 1995, incorporated by reference to Form 8-K dated August 31, 1995. 10.15 Amendment to Purchase Agreement - Building 47 of the Dayton Industrial Complex - between the Partnership and Mid-States Development Company, dated June 15, 1995, incorporated by reference to Form 8-K dated August 31, 1995. 10.16 Third Amendment to Purchase Agreement - Building 47 of the Dayton Industrial Complex - between the Partnership and Mid-States Development Company, dated July 19, 1995, incorporated by reference to Form 8-K dated August 31, 1995. 10.17 Assignment of Permits, Etc. - Building 47 of the Dayton Industrial Complex - between the Partnership and Mid-States Development Company, dated August 22, 1995, incorporated by reference to Form 8-K dated August 31, 1995. 10.18 Assignment and Assumption of Leases and Security Deposits - Building 47 of the Dayton Industrial Complex - between the Partnership and Mid-States Development Company, dated August 22, 1995, incorporated by reference to Form 8-K dated August 31, 1995. 10.19 Assignment of Warranties - Building 47 of the Dayton Industrial Complex - between the Partnership and Mid-States Development Company, dated August 22, 1995, incorporated by reference to Form 8-K dated August 31, 1995. 10.20 Bill of Sale and Assignment - Building 47 of the Dayton Industrial Complex - between the Partnership and Mid-States Development Company, dated August 22, 1995, incorporated by reference to Form 8-K dated August 31, 1995. 10.21 Limited Warranty Deed - Building 47 of the Dayton Industrial Complex - between the Partnership and Mid-States Development Company, dated August 22, 1995, incorporated by reference to Form 8-K dated August 31,1995. Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: A Form 8-K dated August 31, 1995 was filed reporting the sale of Building 47 of the Dayton Industrial Complex, located at 3920 Space Drive, Vandalia, Ohio, 45377. 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 PARTNERS XIV By: Angeles Realty Corporation II Managing General Partner By: /s/Carroll D. Vinson Carroll D. Vinson President By: /s/Robert D. Long, Jr. Robert D. Long, Jr. Controller and Principal Accounting Officer Date: November 13, 1995 EX-27 2
5 This schedule contains summary financial information extracted from Angeles Partners XIV 1995 Third Quarter 10-QSB and is qualified in its entirety by reference to such filing. 0000759859 ANGELES PARTNERS XIV 1 9-MOS DEC-31-1995 SEP-30-1995 315,791 0 28,692 42,383 0 0 52,874,612 26,300,395 28,610,042 0 48,219,514 0 0 0 (24,704,758) 28,610,042 0 6,136,875 0 0 9,221,806 0 4,488,614 (3,006,853) 0 (3,006,853) 0 0 0 (3,006,853) (67.44) 0 The Registrant has an unclassified balance sheet.
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