-----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, To/NPQleGdc8CDIPCh88uDrJ4M0rI+3ZFWAs1gF5zk1vSaXX3r80ISm9z6LKVfNi fX9O+YCIuQRP0ioiKEy0qg== 0000720460-97-000008.txt : 19970514 0000720460-97-000008.hdr.sgml : 19970514 ACCESSION NUMBER: 0000720460-97-000008 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970513 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES INCOME PROPERTIES LTD IV CENTRAL INDEX KEY: 0000763049 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953974194 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-14283 FILM NUMBER: 97602859 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 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, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period.........to......... Commission file number 0-14283 ANGELES INCOME PROPERTIES, LTD. IV (Exact name of small business issuer as specified in its charter) California 95-3974194 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) One Insignia Financial Plaza 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 a) ANGELES INCOME PROPERTIES, LTD. IV CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) March 31, 1997 Assets Cash and cash equivalents: Unrestricted $ 3,109 Restricted--tenant security deposits 10 Accounts receivable, net of allowance of $123 249 Escrows for taxes 238 Restricted escrows 369 Other assets 619 Investment properties Land $ 2,708 Buildings and related personal property 20,241 22,949 Less accumulated depreciation (11,766) 11,183 $ 15,777 Liabilities and Partners' Deficit Liabilities Accounts payable $ 73 Tenant security deposits 8 Accrued taxes 55 Other liabilities 19 Mortgage note payable 15,326 Equity interest in net liabilities of joint venture, net of advances of $1,632 (Note B) 14,110 Partners' Deficit General partner $ (1,415) Limited partners (131,585 units issued and outstanding) (12,399) (13,814) $ 15,777 See Accompanying Notes to Consolidated Financial Statements b) ANGELES INCOME PROPERTIES, LTD. IV CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended March 31, 1997 1996 Revenues: Rental income $ 1,075 $ 1,096 Other income 41 26 Total revenues 1,116 1,122 Expenses: Operating 288 292 General and administrative 102 80 Maintenance 86 63 Depreciation 257 259 Interest 383 367 Property taxes 55 57 Bad debt recovery, net (4) (132) Total expenses 1,167 986 (Loss) income before equity in loss of joint venture(s) (51) 136 Equity in loss of joint venture(s) (468) (479) Net loss $ (519) $ (343) Loss allocated to general partner (2%) $ (10) $ (7) Loss allocated to limited partners (98%) (509) (336) Net loss $ (519) $ (343) Net loss per limited partnership unit $ (3.87) $ (2.55) See Accompanying Notes to Consolidated Financial Statements c) ANGELES INCOME PROPERTIES, LTD. IV CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT (Unaudited) (in thousands, except unit data) March 31, 1997
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 131,800 $ 1 $ 65,900 $ 65,901 Partners' deficit at December 31, 1996 131,585 $ (1,405) $ (11,890) $ (13,295) Net loss for the three months ended March 31, 1997 -- (10) (509) (519) Partners' deficit at March 31, 1997 131,585 $ (1,415) $ (12,399) $ (13,814) See Accompanying Notes to Consolidated Financial Statements
d) ANGELES INCOME PROPERTIES, LTD. IV CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three Months Ended March 31, 1997 1996 Cash flows from operating activities: Net loss $ (519) $ (343) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation 257 259 Amortization of loan costs and leasing commissions 23 58 Bad debt recovery, net (4) (132) Equity in loss of joint venture(s) 468 479 Change in accounts: Restricted cash (4) -- Accounts receivable 1 89 Escrows for taxes and insurance 57 93 Other assets (35) (195) Tenant security deposit liabilities (1) -- Accounts payable (20) (37) Accrued taxes (83) (90) Other liabilities (158) (9) Net cash (used in) provided by operating activities (18) 172 Cash flows from investing activities: Property improvements and replacements (71) (32) Advances to joint ventures -- (456) Deposits to restricted escrows (104) -- Withdrawals from restricted escrows 44 -- Proceeds from notes receivable -- 109 Net cash used in investing activities (131) (379) Cash flows used in financing activities: Payments on mortgage notes payable (50) (74) Net decrease in unrestricted cash and cash equivalents (199) (281) Unrestricted cash and cash equivalents at beginning of period 3,308 3,426 Unrestricted cash and cash equivalents at end of period $ 3,109 $ 3,145 Supplemental disclosure of cash flow information: Cash paid for interest $ 499 $ 356 Supplemental disclosure of non-cash investing activities: Fixed assets in accounts payable $ 11 $ -- See Accompanying Notes to Consolidated Financial Statements
ANGELES INCOME PROPERTIES, LTD. IV NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of Angeles Realty Corporation II (the "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, 1997, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1997. For further information, refer to the financial statements and footnotes thereto included in Angeles Income Properties Ltd. IV's (the "Partnership" or "Registrant") annual report on Form 10-KSB for the fiscal year ended December 31, 1996. Certain reclassifications have been made to the 1996 information to conform to the 1997 presentation. NOTE B - INVESTMENT IN JOINT VENTURE The Partnership has a 66.7% investment in Northtown Mall Partners ("Northtown") which is shown as "Equity interest in net liabilities of the joint venture" on the balance sheet. The Partnership had a 43% investment in the Burlington Outlet Mall Joint Venture ("Burlington"). The Partnership no longer has an investment in Burlington due to the foreclosure of Burlington's investment property in 1995. The condensed balance sheet information as of March 31, 1997, for Northtown and Burlington is as follows: Northtown Burlington (in thousands) Assets Cash $ 973 $ 26 Other assets 6,425 2 Investment property, net 26,187 -- Total $ 33,585 $ 28 Northtown Burlington (in thousands) Liabilities and Partners' (Deficit) Capital Other liabilities $ 5,798 $ 17 Mortgage note payable, in default 51,326 -- Partners'(deficit) capital (23,539) 11 Total $ 33,585 $ 28 The condensed profit and loss statements for the three months ended March 31, 1997 and 1996, for Northtown and Burlington is as follows: Northtown Burlington (in thousands) (in thousands) 1997 1996 1997 1996 Revenue $ 2,696 $ 2,573 $ -- $ 11 Costs and expenses (3,399) (3,293) -- -- Net (loss) income $ (703) $ (720) $ -- $ 11 The Partnership's equity in the losses of the joint venture(s) was $468,000 and $479,000 for the three months ended March 31, 1997 and 1996, respectively. The Partnership accounts for its 66.7% investment in Northtown using the equity method of accounting. Under the equity method, the Partnership records its equity interest in earnings or losses of the joint venture; however, the investment in the joint venture will be recorded at an amount less than zero (a liability) to the extent of the Partnership's share of net liabilities of the joint venture (See "Note D"). NOTE C - TRANSACTIONS WITH AFFILIATED PARTIES The Partnership has no employees and is dependent on the 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 payments were made to the General Partner and affiliates during the three months ended March 31, 1997 and 1996: 1997 1996 (in thousands) Property management fees $ 34 $ 39 Lease commissions -- 39 Reimbursement for services of affiliates 58 48 The Partnership insures its properties under a master policy through an agency and insurer unaffiliated with the General Partner. An affiliate of the 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 General Partner who receives payment on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the General Partner, by virtue of the agent's obligations is not significant. In July 1993, Angeles Mortgage Investment Trust ("AMIT") initiated litigation against Angeles Fort Worth Option Joint Venture ("Forth Worth") and other partnerships which loaned money to AMIT seeking to avoid repayment of such obligations. The Partnership had a 43% interest in Forth Worth. The Partnership subsequently filed a counterclaim against AMIT seeking to enforce the obligation, the principal amount of which is $2,240,000 plus accrued interest from March 1993 ("AMIT Obligation"). On November 9, 1994, Fort Worth 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 against AMIT was satisfied by a cash payment by AMIT totaling $1,933,000 (the "Settlement Amount") plus interest at closing. These funds were applied against the Partnership's $5,000,000 note receivable from Fort Worth. On August 9, 1995, Fort Worth and Angeles entered into an agreement in principle regarding the allowance of an amended claim for the deficiency between the original principal and the Settlement Amount (the "deficiency"). The amended claim equaled 90% of the deficiency, or $276,000. In January 1996, the Partnership received $48,000 from AMIT as payment on the deficiency. NOTE C - TRANSACTIONS WITH AFFILIATED PARTIES MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns 1,675,113 Class B Shares of AMIT. The terms of the Class B Shares provide that they are convertable, in whole or in part, into Class A Shares on the basis of 1 Class A Share for every 49 Class B Shares (however, in connection with the settlement agreement described in the following paragraph, MAE GP has agreed not to convert the Class B Shares so long as AMIT's option is outstanding). 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, providing MAE GP with approximately 39% of the total voting power of AMIT (unless and until converted to Class A Shares, in which case the percentage of the vote controlled represented by the shares held by MAE GP would approximate 1.3% 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 and 1996 annual meetings 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, Insignia Properties, L.P. ("IPLP"), an affiliate of the General Partner and an affiliate of Insignia Financial Group, Inc. ("Insignia"), which provides property management and partnership administration services to the Partnership, owns 96,800 Class A Shares of AMIT at March 31, 1997. These Class A Shares represent approximately 2.2% of the total voting power of AMIT. 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. In connection with such settlement, AMIT delivered to MAE GP cash in the sum of $250,000 at closing (which occurred April 14, 1995) as payment for the option. If and when the option is exercised, AMIT will be required to remit to MAE GP an additional $94,000. Simultaneously with the execution of the option and as part of the settlement, MAE GP executed an irrevocable proxy in favor of AMIT, the result of which is that MAE GP is permitted 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 is obligated to 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). On April 3, 1997, Insignia and AMIT entered into a non-binding agreement in principle contemplating, among other things, a business combination of AMIT and Insignia Properties Trust, an entity owned 98% by Insignia and its affiliates ("IPT"). It is anticipated that the resulting combined entity would be owned approximately 82% by Insignia and its affiliates and 18% by the pre-combination AMIT shareholders (including MAE GP and IPLP). The proposed transaction is contingent upon, among other things, satisfactory review of the business, operations, properties and assets of AMIT and IPT, the negotiation and execution of definitive agreements and the approval of the proposed transaction by the trustees and shareholders of each of AMIT and IPT. In 1992, the Partnership loaned Forth Worth $5,000,000 to cover leasing commissions, tenant improvements, and capital expenditures. The note payable required interest at a rate of prime plus 1.5% with monthly interest only payments through January 1996, at which time the principal was due. The note was in default in prior years due to non-payment of interest when due. The Partnership may make advances to the affiliated joint venture as deemed appropriate by the General Partner. These advances do not bear interest and do not have stated terms of repayment. NOTE D - SUBSEQUENT EVENT Effective April 1, 1997, the Northtown Mall property was sold to an affiliate of the lender for $43,000,000. Northtown received approximately $1,600,000 in proceeds as a result of the sale. The Partnership will recognize a gain on the sale of this investment property in the second quarter of 1997. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of two commercial properties. The following table sets forth the average occupancy of the properties for the three months ended March 31, 1997 and 1996: Average Occupancy Property 1997 1996 Factory Merchant's Mall 92% 90% Pigeon Forge, Tennessee (1) Eastgate Market Place Walla Walla, Washington (2) 90% 93% 1) Nationwide the outlets mall industry is not performing well. 2) The General Partner is presently in negotiations to lease an additional 25,000 square feet of space. The General Partner is hopeful that such negotiations will lead to occupancy of this space in 1997. The Partnership realized a net loss of $519,000 for the three months ended March 31, 1997, as compared to a net loss of $343,000 for the three months ended March 31, 1996. The increase in the net loss for the three months ended March 31, 1997, as compared to the three months ended March 31, 1996, is primarily due to a decrease in rental income and bad debt recovery and increases in general and administrative, maintenance and interest expense. The decrease in rental income for the three months ended March 31, 1997, as compared to the three months ended March 31, 1996, is a result of a decrease in occupancy at Eastgate Market Place which was offset, in part, by an increase in occupancy at Factory Merchants Mall. During the three months ended March 31, 1996, the Partnership recognized bad debt recovery of $132,000 relating to collections on accounts and notes receivable that were previously reserved. The Partnership recovered $48,000 from AMIT and $61,000 from Forth Worth as payment on its note payable to the Partnership (see "Note C"). The increase in general and administrative expenses is due primarily to an increase in legal fees related to expenses incurred as a result of ongoing litigation (see "Item 1 Legal Proceedings"). The increase in maintenance expenses is due primarily to increases in repair and maintenance contracts and parking lot and mall area cleaning expenses, primarily at Factory Merchant's Mall. Finally, the increased interest expense is the result of the increased principal balance on the debt secured by Factory Merchant's Mall. This debt was refinanced in 1996. As part of the ongoing business plan of the Partnership, the 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 expenses. As part of this plan, the 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 General Partner will be able to sustain such a plan. At March 31, 1997, the Partnership had unrestricted cash and cash equivalents of $3,109,000 compared to $3,145,000 at March 31, 1996. Net cash provided by operating activities decreased primarily due to an increased net loss and a decrease in other liabilities. Other liabilities decreased due to an additional debt service payment in March 1997. Net cash used in investing activities decreased due to no advances to Northtown in 1997. The Northtown Mall property continued to experience cash shortfalls and has been dependent upon the Partnership and Angeles Income Properties Ltd. III (the 33.3% owner of Northtown) to cover such shortfalls in order to meet operating and debt service requirements for this property (see discussion below regarding this investment property). During the three months ended March 31, 1996, the Partnership advanced $456,000 to Northtown. This use of cash was partially offset by an in- flow of cash as a result of the proceeds received on notes receivable from AMIT and Fort Worth. Net cash used in financing activities decreased due to the refinancing of debt secured by Factory Merchants Mall in 1996. The new debt carries a higher principal balance, resulting in decreased debt amortization in 1997. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of $15,326,000, which is secured by the Factory Merchant's Mall investment property, matures in October 2006 and carries a stated interest rate of 9.75%. Future cash distributions will depend on the levels of net cash generated from operations, refinancings, property sales and the availability of cash reserves. There were no cash distributions in the first three months of 1997 or 1996. At March 31, 1997, Northtown is in default on its non-recourse mortgage note payable due to allowing a mechanics lien to remain on its mortgaged property, which is in violation of its mortgage agreement. The Partnership incurred significant costs for tenant improvements and other expenditures for a new tenant during 1996. In November 1996, the lender and the Partnership disagreed on the funding for these costs, resulting in the Partnership refusing to authorize any further disbursements from its "Improvements and Leasing Commissions Reserve Escrow" to pay the remaining balance of approximately $1 million due to the contractors and other vendors. In January 1997, the contractors filed a mechanics lien against the property. In addition, the Partnership ceased servicing the mortgage debt secured by this property in March 1997. On March 15, 1991, Northtown and the holder of the Northtown Mall mortgage note payable entered into an Option Agreement ("Option") whereby such lender has the right and an option to purchase the Northtown Mall property on the terms and conditions as set forth in the Option. The purchase price of the property, as set forth in the Option, is defined as the fair market value of the property. Such Option can be exercised by written notice by the lender at specified dates. In accordance with the Option, the lender gave notice to Northtown in November 1996, that it intended to exercise this Option. The lender and Northtown began the determination of the property's fair value as defined in the Option and in the loan agreement. The General Partner believed that the appraisals would produce an option price that would be substantially less than the current outstanding debt. The General Partner made a proposal to allow the lender to consummate its option to purchase the property. Subsequent to March 31, 1997, the Northtown Mall investment property was sold to an affiliate of the lender for $43,000,000. The mortgage debt secured by this property is non-recourse to the Partnership. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In July 1993, Angeles Mortgage Investment Trust ("AMIT") initiated litigation against Angeles Fort Worth Option Joint Venture ("Forth Worth") and other partnerships which loaned money to AMIT seeking to avoid repayment of such obligations. The Partnership had a 43% interest in Forth Worth. The Partnership subsequently filed a counterclaim against AMIT seeking to enforce the obligation, the principal amount of which is $2,240,000 plus accrued interest from March 1993 ("AMIT Obligation"). On November 9, 1994, Fort Worth 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 against AMIT was satisfied by a cash payment by AMIT totaling $1,933,000 (the "Settlement Amount") plus interest at closing. These funds were applied against the Partnership's $5,000,000 note receivable from Fort Worth. On August 9, 1995, Fort Worth and Angeles entered into an agreement in principle regarding the allowance of an amended claim for the deficiency between the original principal and the Settlement Amount (the "deficiency"). The amended claim equaled 90% of the deficiency, or $276,000. In January 1996, the Partnership received $48,000 from AMIT as payment on the deficiency. MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns 1,675,113 Class B Shares of AMIT. The terms of the Class B Shares provide that they are convertable, in whole or in part, into Class A Shares on the basis of 1 Class A Share for every 49 Class B Shares (however, in connection with the settlement agreement described in the following paragraph, MAE GP has agreed not to convert the Class B Shares so long as AMIT's option is outstanding). 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, providing MAE GP with approximately 39% of the total voting power of AMIT (unless and until converted to Class A Shares, in which case the percentage of the vote controlled represented by the shares held by MAE GP would approximate 1.3% 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 and 1996 annual meetings 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, Insignia Properties, L.P. ("IPLP"), an affiliate of the General Partner and an affiliate of Insignia Financial Group, Inc. ("Insignia"), which provides property management and partnership administration services to the Partnership, owns 96,800 Class A Shares of AMIT at March 31, 1997. These Class A Shares represent approximately 2.2% of the total voting power of AMIT. 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. In connection with such settlement, AMIT delivered to MAE GP cash in the sum of $250,000 at closing (which occurred April 14, 1995) as payment for the option. If and when the option is exercised, AMIT will be required to remit to MAE GP an additional $94,000. Simultaneously with the execution of the option and as part of the settlement, MAE GP executed an irrevocable proxy in favor of AMIT, the result of which is that MAE GP is permitted 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 is obligated to 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). On April 3, 1997, Insignia and AMIT entered into a non-binding agreement in principle contemplating, among other things, a business combination of AMIT and Insignia Properties Trust, an entity owned 98% by Insignia and its affiliates ("IPT"). It is anticipated that the resulting combined entity would be owned approximately 82% by Insignia and its affiliates and 18% by the pre-combination AMIT shareholders (including MAE GP and IPLP). The proposed transaction is contingent upon, among other things, satisfactory review of the business, operations, properties and assets of AMIT and IPT, the negotiation and execution of definitive agreements and the approval of the proposed transaction by the trustees and shareholders of each of AMIT and IPT. The Partnership, along with other affiliates, has been named in a suit brought by a company which owned a 20% interest ("Plaintiff") in Fort Worth's investment property, the W.T. Waggoner Building, which was sold in 1995. The Plaintiff is suing for breach of contract and negligence for mismanagement of the property. The General Partner believes that there is no merit in this suit and intends to vigorously defend it. The Registrant is unaware of any other pending or outstanding litigation that is not of a routine nature. The General Partner of the Registrant believes that all such pending or outstanding litigation will be resolved without a material adverse effect upon the business, financial condition, or operations of the Partnership. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: No reports on for 8-K were filed during the three months ended March 31, 1997. 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 INCOME PROPERTIES, LTD. IV By: Angeles Realty Corporation II 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 13, 1997 EX-27 2
5 This schedule contains summary financial information extracted from Angeles Income Properties Ltd. IV 1997 First Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000763049 ANGELES INCOME PROPERTIES LTD. IV 1,000 3-MOS DEC-31-1997 MAR-31-1997 3,109 0 249 123 0 0 22,949 11,766 15,777 0 15,326 0 0 0 (13,814) 15,777 0 1,116 0 0 1,167 0 383 (519) 0 (519) 0 0 0 (519) (3.87) 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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