-----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, Tf56i+ZinU0g/4PllD17AkWaR5jtYeE70j+tHXHyqHES8Hv4WOc0cjVzFJAEMqPZ UW4ZTt+3ilNB5GEOp0/J+A== 0000711642-98-000042.txt : 19981118 0000711642-98-000042.hdr.sgml : 19981118 ACCESSION NUMBER: 0000711642-98-000042 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES PARTNERS XV CENTRAL INDEX KEY: 0000788331 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 954046025 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-15546 FILM NUMBER: 98750948 BUSINESS ADDRESS: STREET 1: 1873 SOUTH BELLAIRE STREET 17TH FLOOR CITY: DENVER STATE: CO ZIP: 80222 BUSINESS PHONE: 3037578101 MAIL ADDRESS: STREET 1: 1873 SOUTH BELLAIRE STREET 17TH FLOOR CITY: DENVER STATE: CO ZIP: 80222 10QSB 1 FORM 10-QSB--QUARTERLY OR TRANSITIONAL 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 September 30, 1998 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from.........to......... Commission file number 0-15546 ANGELES PARTNERS XV (Exact name of small business issuer as specified in its charter) California 95-4046025 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 55 Beattie Place, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 (Issuer's telephone number) 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 XV STATEMENT OF NET LIABILITIES IN LIQUIDATION (Unaudited) (in thousands) September 30, 1998 Assets Cash $ 220 Other assets 5 225 Liabilities Interest 915 Other liabilities 30 Notes payable, including $1,582 in default 1,602 Estimated costs during the period of liquidation 103 2,650 Net liabilities in liquidation $(2,425) See Accompanying Notes to Financial Statements b) ANGELES PARTNERS XV STATEMENT OF CHANGES IN NET LIABILITIES IN LIQUIDATION (Unaudited) (in thousands) Nine Months Ended September 30, 1998 Net liabilities in liquidation at December 31, 1997 $ (6,273) Changes in net liabilities in liquidation attributed to: Decrease in cash (136) Increase in other assets 1 Decrease in investment property (4,127) Decrease in accrued taxes 111 Decrease in accrued interest 1,951 Increase in other liabilities (30) Decrease in mortgage payable 5,365 Decrease in estimated costs during the period of liquidation 713 Net liabilities in liquidation at September 30, 1998 $ (2,425) See Accompanying Notes to Financial Statements b) ANGELES PARTNERS XV STATEMENT OF CHANGES IN NET LIABILITIES IN LIQUIDATION (Unaudited) (in thousands) Nine Months Ended September 30, 1997 Net liabilities in liquidation at December 31, 1996 $ (4,025) Changes in net liabilities in liquidation attributed to: Decrease in cash (14) Increase in accrued taxes (96) Increase in accrued interest (501) Decrease in estimated costs during the period of liquidation 345 Net liabilities in liquidation at September 30, 1997 $ (4,291) See Accompanying Notes to Financial Statements e) ANGELES PARTNERS XV NOTES TO FINANCIAL STATEMENTS NOTE A - BASIS OF PRESENTATION As of December 31, 1994, Angeles Partnership XV (the "Partnership") adopted the liquidation basis of accounting. The Partnership had experienced significant recurring operating losses. In March 1995, the lender on the non-recourse debt secured by the Marina Plaza notified the Partnership that this debt was in default and initiated foreclosure proceedings. Marina Plaza was placed in receivership in June 1995, and was foreclosed upon on August 1, 1995. In addition, the Partnership was in default on recourse indebtedness totaling $3,500,000 due to Angeles Mortgage Investment Trust ("AMIT"). Of this debt, $1,500,000 was secured by one of the remaining Cleveland Industrial Complex ("Cleveland") buildings and AMIT placed the property in receivership in January 1995, and foreclosed on the property on September 6, 1995. AMIT also foreclosed on another of the Cleveland buildings on August 23, 1995. The remaining $2,000,000 was recourse to the Partnership and AMIT received a default judgment against the Partnership on January 18, 1995. As a result of the foreclosure on the Cleveland building on August 23, 1995, this judgment was reduced by $500,000. In July of 1996, AMIT entered a complaint for foreclosure and other relief against the Partnership. On July 26, 1996, the remaining Cleveland Properties were placed in receivership. The receiver is authorized to collect the rents, profits and all income derived from the properties, to maintain the premises, and otherwise preserve, manage, maintain and protect such properties. On July 28, 1998, the Partnership executed an Agreement for Deed in Lieu of Foreclosure by and between the Partnership and AMIT, a California business trust. Pursuant thereto, the Partnership conveyed the properties to AMIT in lieu of mortgage foreclosure. As a result of the foreclosure, the debt has been deemed satisfied. Angeles Realty Corporation II, the general partner of the Partnership (the "Managing General Partner"), did not believe that it was in the Partnership's best interest to contest this foreclosure action because there is no equity in the properties or the Partnership. Furthermore, the Partnership did not have the funds with which to contest this action. Any remaining cash will be used to cover the costs of liquidating the Partnership. The Partnership does not intend nor does it have the ability to purchase any additional properties and the Managing General Partner has decided to liquidate the Partnership during the fourth quarter of 1998. Although the Partnership has $2,425,000 in net liabilities in liquidation at September 30, 1998, neither the general partners nor the limited partners will be required to contribute additional capital to cover this deficit. It is not anticipated that the Partnership will have any funds to distribute to the partners. As a result of the decision to liquidate the Partnership, the Partnership changed its basis of accounting for its financial statements at December 31, 1994, from the going concern basis of accounting to the liquidation basis of accounting. Consequently, assets have been valued at estimated net realizable value and liabilities are presented at their estimated settlement amounts, including estimated costs associated with carrying out the liquidation. The valuation of assets and liabilities necessarily requires many estimates and assumptions and there are substantial uncertainties in carrying out the liquidation. The actual realization of assets and settlement of liabilities could be higher or lower than amounts indicated and is based upon the Managing General Partner's estimates as of the date of the financial statements. On July 28, 1998, the investment properties were deeded in lieu of foreclosure to AMIT. The statement of net liabilities in liquidation as of September 30, 1998, includes approximately $103,000 of accrued costs that the Managing General Partner estimates will be incurred during the period of liquidation, based on the assumption that the liquidation process will be completed during the fourth quarter of 1998. These costs include anticipated legal fees and administrative expenses. Because the success in realization of assets and the settlement of liabilities is based on the Managing General Partner's best estimates, the liquidation period may be shorter than projected or it may be extended beyond the projected period. NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES The Partnership has no employees and is dependent on the Managing General Partner and its affiliates for the management and administration of all partnership activities. Affiliates of the Managing General Partner provide property management and asset management services to the Partnership. 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 day to day management of the remaining investment properties are managed by a third party receiver, which was court appointed. The following amounts were paid or accrued to the Managing General Partner and affiliates during the nine months ended September 30, 1998 and 1997: 1998 1997 (in thousands) Reimbursement for services of affiliates $ 30 $ 28 For the period of January 1, 1997 through August 31, 1997, the Partnership insured its properties under a master policy through an agency affiliated with the Managing General Partner with an 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 master policy. The current agent assumed the financial obligations to the affiliate of the Managing General Partner, which 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 ("AAP"), a Delaware limited partnership was organized to acquire and hold the obligations evidencing the working capital loan previously provided by Angeles Capital Investment, 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. AAP's working capital loan funded the Partnership's operating deficits in prior years. Total indebtedness, which is included as a note payable, was approximately $1,582,000 and is in default at September 30, 1998. Total interest charges for this loan were approximately $126,000 and $125,000 for the nine month periods ended September 30, 1998 and 1997, respectively. Total past due accrued interest is approximately $909,000 at September 30, 1998. NOTE C - TRANSFER OF CONTROL; SUBSEQUENT EVENT On October 1, 1998, Insignia Financial Group, Inc. completed its merger with and into Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust, with AIMCO being the surviving corporation (the "Insignia Merger"). As a result of the Insignia Merger, AIMCO acquired control of the Managing General Partner. In addition, AIMCO also acquired approximately 51% of the outstanding common shares of beneficial interest of Insignia Properties Trust ("IPT"), the sole shareholder of the Managing General Partner. Also, effective October 1, 1998 IPT and AIMCO entered into an Agreement and plan of Merger pursuant to which IPT is to be merged with and into AIMCO or a subsidiary of AIMCO (the "IPT Merger"). The IPT Merger requires the approval of the holders of a majority of the outstanding IPT Shares. AIMCO has agreed to vote all of the IPT Shares owned by it in favor of the IPT Merger and has granted an irrevocable limited proxy to unaffiliated representatives of IPT to vote the IPT Shares acquired by AIMCO and its subsidiaries in favor of the IPT Merger. As a result of AIMCO's ownership and its agreement, the vote of no other holder of IPT is required to approve the merger. The Managing General Partner does not believe that this transaction will have a material effect on the affairs and operations of the Partnership. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OR OPERATION Results of Operations, Liquidity and Capital Resources As of December 31, 1994, the Angeles Partnership XV (the "Partnership") adopted the liquidation basis of accounting. The Partnership had experienced significant recurring operating losses. In March 1995, the lender on the non- recourse debt secured by Marina Plaza notified the Partnership that this debt was in default and initiated foreclosure proceedings. Marina Plaza was placed in receivership in June 1995, and was foreclosed upon on August 1, 1995. The Partnership was in default on recourse indebtedness totaling $3,500,000 due to Angeles Mortgage Investment Trust ("AMIT"). Of this debt, $1,500,000 was secured by one of the remaining Cleveland Industrial Complex ("Cleveland") buildings and AMIT placed the property in receivership in January 1995, and foreclosed on it September 6, 1995. AMIT also foreclosed on another of the Cleveland buildings on August 23, 1995. The remaining $2,000,000 was recourse to the Partnership and AMIT received a default judgment against the Partnership on January 18, 1995. As a result of the foreclosure on the Cleveland building on August 23, 1995, this judgment was reduced by $500,000. In July of 1996, AMIT entered a complaint for foreclosure and other relief against the Partnership. On July 26, 1996, the remaining Cleveland Properties were placed in receivership. The receiver is authorized to collect the rents, profits and all income derived from the properties, to maintain the premises, and otherwise preserve, manage, maintain and protect such properties. On July 28, 1998, the Partnership executed an Agreement for Deed in Lieu of Foreclosure by and between the Partnership and AMIT, a California business trust. Pursuant thereto, the Partnership conveyed to AMIT in lieu of mortgage foreclosure. As a result of the foreclosure, the debt has been satisfied. Angeles Realty Corporation II, the general partner, of the Partnership (the "Managing General Partner") did not believe that it was in the Partnership's best interest to contest this foreclosure action because there is no equity in the property or Partnership. Furthermore, the Partnership does not have the funds with which to contest this action. Any remaining cash will be used to cover the costs of liquidating the Partnership. The Partnership does not intend nor does it have the ability to purchase any additional properties and the Managing General Partner has decided to liquidate the Partnership during the fourth quarter of 1998. Although the Partnership has $2,425,000 in net liabilities in liquidation at September 30, 1998, neither the general partners nor the limited partners will be required to contribute additional capital to cover this deficit. It is not anticipated that the partnership will have any funds to distribute to its partners. AAP's working capital loan funded the Partnership's operating deficits in prior years. Total indebtedness, which is included as a note payable, was approximately $1,582,000 and is in default at September 30, 1998. Total interest charges for this loan were approximately $126,000 and $125,000 for the nine month periods ended September 30, 1998 and 1997, respectively. Total past due accrued interest is approximately $909,000 at September 30, 1998. The statement of net liabilities in liquidation as of September 30, 1998, includes approximately $103,000 of accrued costs that the Managing General Partner estimates will be incurred during the period of liquidation, based on the assumption that the liquidation process will be completed during the fourth quarter of 1998. These costs include anticipated legal fees and administrative expenses. Because the success in realization of assets and the settlement of liabilities is based on the Managing General Partner's best estimates, the liquidation period may be shorter than projected or it may be extended beyond the projected period. For the nine months ended September 30, 1998, the Partnership recorded a decrease in the estimated costs during the period of liquidation of approximately $713,000. This decrease is primarily due to the payment of liquidation charges and a decrease in the estimated costs to liquidate as a result of the deed in lieu of foreclosure which occurred on July 28, 1998. Transfer of Control; Subsequent Event On October 1, 1998, Insignia Financial Group, Inc. completed its merger with and into Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust, with AIMCO being the surviving corporation (the "Insignia Merger"). As a result of the Insignia Merger, AIMCO acquired control of the Managing General Partner. In addition, AIMCO also acquired approximately 51% of the outstanding common shares of beneficial interest of Insignia Properties Trust ("IPT"), the sole shareholder of the Managing General Partner. Also, effective October 1, 1998 IPT and AIMCO entered into an Agreement and plan of Merger pursuant to which IPT is to be merged with and into AIMCO or a subsidiary of AIMCO (the "IPT Merger"). The IPT Merger requires the approval of the holders of a majority of the outstanding IPT Shares. AIMCO has agreed to vote all of the IPT Shares owned by it in favor of the IPT Merger and has granted an irrevocable limited proxy to unaffiliated representatives of IPT to vote the IPT Shares acquired by AIMCO and its subsidiaries in favor of the IPT Merger. As a result of AIMCO's ownership and its agreement, the vote of no other holder of IPT is required to approve the merger. The Managing General Partner does not believe that this transaction will have a material effect on the affairs and operations of the Partnership. Year 2000 As a result of the liquidation and winding down of the Partnership affairs, which are expected to occur prior to the year 2000, the Managing General Partner does not believe the Year 2000 issue will have an impact on the Partnership. Other Certain items discussed in this quarterly report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act") and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Partnership to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements. Such forward-looking statements speak only as of the date of this quarterly report. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates of revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, the Managing General Partner and several of their affiliated partnerships and corporate entities. The complaint purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging the acquisition by Insignia Financial Group, Inc. ("Insignia") and entities which were, at the time, affiliates of Insignia ("Insignia Affiliates") of interests in certain general partner entities, past tender offers by Insignia Affiliates to acquire limited partnership units, the management of partnerships by Insignia Affiliates as well as a recently announced agreement between Insignia and Apartment Investment and Management Company. The complaint seeks monetary damages and equitable relief, including judicial dissolution of the Partnership. On June 25, 1998, the Managing General Partner filed a motion seeking dismissal of the action. In lieu of responding to the motion, the plaintiffs have filed an amended complaint. The Managing General Partner has filed demurrers to the amended complaint which are scheduled to be heard on January 8, 1999. The Managing General Partner believes the action to be without merit, and intends to vigorously defend it. On July 30, 1998 certain entities claiming to own limited partnership interests in certain limited partnerships whose general partners were, at the time, affiliates of Insignia filed a complaint entitled Everest Properties, LLC. v. Insignia Financial Group, Inc., et al. in the Superior Court of the State of California, County of Los Angeles. The action involves 44 real estate limited partnerships (including the Partnership) in which the plaintiffs allegedly own interests and which Insignia Affiliates allegedly manage or control (the "Subject Partnerships"). The complaint names as defendants Insignia, several Insignia Affiliates alleged to be managing partners of the defendant limited partnerships, the Partnership and the Managing General Partner. Plaintiffs allege that they have requested from, but have been denied by each of the Subject Partnerships, lists of their respective limited partners for the purpose of making tender offers to purchase up to 4.9% of the limited partner units of each of the Subject Partnerships. The complaint also alleges that certain of the defendants made tender offers to purchase limited partner units in many of the Subject Partnerships, with the alleged result that plaintiffs have been deprived of the benefits they would have realized from ownership of the additional units. The plaintiffs assert eleven causes of action, including breach of contract, unfair business practices, and violations of the partnership statutes of the states in which the Subject Partnerships are organized. Plaintiffs seek compensatory, punitive and treble damages. The Managing General Partner filed an answer to the complaint on September 15, 1998. The Managing General Partner believes the claims to be without merit and intends to defend the action vigorously. The Partnership is unaware of any other pending or outstanding litigation that is not of a routine nature. The Managing General Partner of the Partnership 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 10.14, Agreement for Deed-in-Lieu-of-Foreclosure, by and between Angeles Partners XV and Angeles Mortgage Investment Trust ("AMIT"), dated July 28, 1998, conveying the Cleveland properties, two located in Strongeville, Ohio and one located in Solon, Ohio to AMIT. Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K filed during the quarter ended September 30, 1998: None. 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 XV By: Angeles Realty Corporation II Its Managing General Partner By: /s/ Patrick Foye Patrick Foye Executive Vice President By: /s/ Timothy R. Garrick Timothy R. Garrick Vice President - Accounting Duly Authorized Officer Date: November 16, 1998 EX-27 2
5 This schedule contains summary financial information extracted from Angeles Partners XV 1998 Third Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000788331 ANGELES PARTNERS XV 1,000 9-MOS DEC-30-1998 SEP-30-1998 220 0 0 0 0 0 0 0 225 0 5,365 0 0 0 (2,425) 225 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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