-----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, PQDl+bj/S74Ao8r/HjHziWHL+gWJ7kV1EwQOSUle8E9hWGmsvTMRK90nRQw8eNrh ffYjhootyg3T3/5qtnyLKg== 0000792181-96-000004.txt : 19960812 0000792181-96-000004.hdr.sgml : 19960812 ACCESSION NUMBER: 0000792181-96-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960809 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES INCOME PROPERTIES LTD V CENTRAL INDEX KEY: 0000792181 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 954049903 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-15547 FILM NUMBER: 96606988 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 June 30, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT For the transition period.........to......... Commission file number 0-15547 ANGELES INCOME PROPERTIES, LTD. V (Exact name of small business issuer as specified in its charter) California 95-4049903 (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 (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 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) ANGELES INCOME PROPERTIES, LTD. V BALANCE SHEET (Unaudited) (in thousands, except unit data) June 30, 1996 Assets Cash and cash equivalents: Unrestricted $ 106 Restricted--tenant security deposits 60 Accounts receivable 7 Escrow for taxes 88 Other assets 85 Investment properties: Land $ 923 Buildings and related personal property 8,204 9,127 Less accumulated depreciation (2,363) 6,764 $ 7,110 Liabilities and Partners' Deficit Liabilities Accounts payable $ 9 Tenant security deposits 61 Accrued interest 2,168 Due to affiliates 959 Other liabilities 114 Notes payable, including $3,720 in default 9,348 Partners' Deficit General partner $ (446) Limited partners (45,021 units issued and outstanding) (5,103) (5,549) $ 7,110 See Accompanying Notes to Financial Statements b) ANGELES INCOME PROPERTIES, LTD. V STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended Six Months Ended June 30, June 30, 1996 1995 1996 1995 Revenues: Rental income $ 361 $ 744 $ 729 $ 1,272 Other income 50 50 100 65 Total revenues 411 794 829 1,337 Expenses: Operating 148 184 347 439 General and administrative 54 61 111 128 Maintenance 29 70 64 129 Depreciation 54 96 121 191 Interest 286 470 627 1,172 Bad debt (recovery) expense, net (1) 7 (1) 7 Property taxes 15 111 64 225 Total expenses 585 999 1,333 2,291 Loss before equity in income of joint ventures, loss on transfer of property in foreclosure and extraordinary gain (174) (205) (504) (954) Equity in income of joint ventures -- 1,009 -- 1,198 Loss on transfer of property in foreclosure (435) -- (435) -- (Loss) income before extraordinary item (609) 804 (939) 244 Extraordinary gain - forgiveness of debt 1,176 497 1,176 497 Net income $ 567 $ 1,301 $ 237 $ 741 Net income allocated to general partner (1%) $ 6 $ 13 $ 2 $ 7 Net income allocated to limited partners (99%) 561 1,288 235 734 Net income $ 567 $ 1,301 $ 237 $ 741 Per limited partnership unit: (Loss) income before extraordinary item $(13.39) $ 17.51 $(20.64) $ 5.31 Extraordinary item 25.86 10.83 25.86 10.83 Net income $ 12.47 $ 28.34 $ 5.22 $ 16.14 See Accompanying Notes to Financial Statements
c) ANGELES INCOME PROPERTIES, LTD. V STATEMENT OF CHANGES IN PARTNERS' DEFICIT (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 45,450 $ 1 $ 45,450 $ 45,451 Partners' deficit at December 31, 1995 45,021 $ (448) $ (5,338) $ (5,786) Net income for the six months ended June 30, 1996 -- 2 235 237 Partners' deficit at June 30, 1996 45,021 $ (446) $ (5,103) $ (5,549) See Accompanying Notes to Financial Statements
d) ANGELES INCOME PROPERTIES, LTD. V STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended June 30, 1996 1995 Cash flows from operating activities: Net income $ 237 $ 741 Adjustments to reconcile net income to net cash provided by operating activities: Equity in income of joint ventures -- (1,198) Depreciation 121 191 Amortization of loan costs 9 57 Bad debt (recovery) expense, net (1) 7 Loss on transfer of property in foreclosure 435 -- Extraordinary gain - forgiveness of debt (1,176) (497) Change in accounts: Restricted cash 7 (16) Accounts receivable 11 (32) Escrows for taxes 11 (35) Other assets -- (4) Accounts payable (26) (7) Tenant security deposit liabilities 4 14 Accrued taxes -- 92 Accrued interest 354 772 Due to affiliates 77 110 Other liabilities (14) 6 Net cash provided by operating activities 49 201 Cash flows from investing activities: Cash transferred upon foreclosure (179) Property improvements and replacements (17) -- Net cash used in investing activities (196) (18) Cash flows used in financing activities: Payments on mortgage notes payable (40) (36) Net (decrease) increase in cash (187) 147 Cash at beginning of period 293 300 Cash at end of period $ 106 $ 447 Supplemental disclosure of cash flow information: Cash paid for interest $ 263 $ 309 Supplemental disclosure of non-cash financing activities: Debt extinguished upon foreclosure $ 850 $ -- See Accompanying Notes to Financial Statements
ANGELES INCOME PROPERTIES, LTD. V SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES (Unaudited) Foreclosures During 1996, Angeles Income Properties, Ltd. V lost its interest in University Center Phase III as the mortgage holder of this property foreclosed on its collateral. In connection with the transaction, the following accounts were adjusted: Cash $ 179,000 Other Assets 2,000 Investment Properties 435,000 Accounts Payable and Other Accrued Liabilities 113,000 Accrued Interest 394,000 Mortgage Note Payable 850,000 See Accompanying Notes to Financial Statements e) ANGELES INCOME PROPERTIES, LTD. V NOTES TO FINANCIAL STATEMENTS (Unaudited) Note A - Going Concern The accompanying financial statements have been prepared assuming Angeles Income Properties, Ltd. V (the "Partnership") will continue as a going concern. The Partnership has incurred recurring operating losses and continues to suffer from inadequate liquidity. It is also in default on $3,720,000 in notes payable to Angeles Mortgage Investment Trust ("AMIT") and does not generate sufficient cash flows to meet current operating requirements. In addition, there are limited identified capital resources available to the Partnership. Until November 1995, the Partnership had a recourse first mortgage note payable to AMIT, a lending trust sponsored by an affiliate of the General Partner, in the amount of $1,800,000 plus accrued interest on University Park Center - Phase IV that was in default due to nonpayment of interest. In May 1995, AMIT initiated foreclosure proceedings and acquired the property in a sheriff's sale, subject to Minnesota law of one year right of redemption, leaving a deficiency judgment. In November 1995, the Partnership granted to AMIT Deeds in Lieu of Foreclosure on University Park Center - Phases I and II and agreed to waive the right of redemption on Phase IV (See "Note C" for further discussion). The Partnership's mortgage of $850,000 secured by University Park Center - Phase III was in default due to nonpayment of interest. The lender foreclosed on University Park Center - Phase III in 1996. The Partnership has second mortgages totalling $3,720,000 and secured by Southgate Village Apartments and Springdale Lake Estates Mobile Home Park. This indebtedness is in default due to nonpayment upon maturity and is recourse to the Partnership. On February 29, 1996, a formal demand for payment of the unpaid principal balance and accrued interest was received from AMIT for the debt secured by Southgate Village Apartments. On June 12, 1996, AMIT filed a Complaint For Foreclosure and Other Relief. The General Partner does not intend to contest the foreclosure and anticipates that this property will be lost in 1997 through foreclosure. On April 11, 1996, a formal demand for payment of the unpaid principal balance and accrued interest was received from AMIT for the debt secured by Springdale Lake Estates Mobile Home Park. The Partnership is presently paying non-debt related expenses of the properties and is current on its two first mortgage notes payable. The General Partner does not have any other plans to remedy the liquidity problems the Partnership is currently experiencing; however, it intends to continue to operate the Partnership 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 classification of liabilities that may result from this uncertainty. 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 General Partner, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 1996, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1996. 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, 1995. Certain reclassifications have been made to 1995 information to conform to the 1996 presentation. 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 expenses were paid or accrued to the General Partner and affiliates during the six months ended June 30, 1996 and 1995: 1996 1995 (in thousands) Property management fees $ 41 $ 48 Reimbursement for services of affiliates ($951,000 accrued at June 30, 1996) 69 110 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 November 1992, Angeles Acceptance Pool, L.P. ("AAP"), a Delaware limited partnership was organized to acquire and hold the obligations evidencing the working capital loan previously provided to the Partnership by Angeles Capital Investments, Inc. ("ACII"). Note C - Transactions with Affiliated Parties (continued) Angeles Corporation ("Angeles") is the 99% limited partner of AAP and Angeles Acceptance Directives, Inc.("AAD"), an affiliate of the 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 General Partner and Angeles, AAD resigned as general partner of AAP and simultaneously received a 1/2% limited partner interest in AAP. This working capital loan funded the Partnership's operating deficits in prior years. Total indebtedness, which is included as a note payable, was approximately $198,000 at June 30, 1996, and June 30, 1995, with monthly interest only payments at prime plus 2%. 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 $10,000 and $11,000 for the six months ended June 30, 1996 and 1995, respectively. AMIT currently provides financing to the Partnership in the total principal amount of $3,720,000 secured by Southgate Village Apartments and Springdale Lake Estate Mobile Home Park. All of this debt is in default at June 30, 1996. During the six months ended June 30, 1995, AMIT provided $6,400,000 in financing (principal only) to the Partnership secured by Southgate Village Apartments, Springdale Lake Estates Mobile Home Park and University Park Center - Phase IV. Total interest expense on this financing was $333,000 and $567,000 for the six months ended June 30, 1996 and 1995, respectively. MAE GP Corporation ("MAE GP"), an affiliate of the 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 1.2% 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 1.2% of the vote). Between the date of acquisition of these shares (November 24, 1992) and March 31, 1995, MAE GP has 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. However, MAE GP may choose to vote these shares as it deems appropriate in the future. In addition, Liquidity Assistance, LLC, ("LAC"), an affiliate of the General Partner and an affiliate of Insignia Financial Group, Inc., which provides property management and partnership administration services to the Partnership, owns 63,200 Class A Shares of AMIT. These Class A Shares entitle LAC to vote approximately 1.5% of the total shares. Note C - Transactions with Affiliated Parties (continued) As part of the settlement of certain disputes with AMIT, MAE GP granted to AMIT an option to acquire the Class B Shares. 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 would 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. The Partnership also had a note payable to Mesa Dunes, Wakonda and Town & Country Partners ("Mesa Dunes") of $5,000,000, secured by its 50% interest in Mesa Dunes, in default due to non-payment of interest and, in February 1995, Mesa Dunes notified the Partnership that it intended to foreclose on its collateral. On April 1, 1995, Mesa Dunes foreclosed on its collateral and the Partnership lost its 50% interest in Mesa Dunes. Note D - Other Items The Partnership had a 57% interest in Angeles Fort Worth Option Joint Venture ("Fort Worth"). Fort Worth's remaining asset was sold on March 22, 1995, and all remaining cash was used to pay Fort Worth's liabilities. As a result, Forth Worth was dissolved effective December 31, 1995, and therefore, the Partnership lost its 57% interest in Forth Worth. Note E - Foreclosure of University Park Center - Phase III University Park Center - Phase III was in default of its mortgage ($850,000 principal plus accrued interest) due to non-payment of interest. The mortgage holder foreclosed upon this property and it was lost in 1996. ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS AND PLAN OF OPERATION The Partnership's investment properties consist of one apartment complex and one mobile home park. The following table sets forth the average occupancy of the properties for the six months ended June 30, 1996 and 1995: Average Occupancy Property 1996 1995 Southgate Village Apartments Bedford Heights, Ohio 94% 92% Springdale Lake Estates Mobile Park Belton, Missouri (1) 74% 77% (1) Occupancy continues to be an issue at this property. The low occupancy can be attributed to the weak economy in the Belton, Missouri, area and due to mobile home dealers purchasing mobile homes and moving these homes to the dealership or to private ground. The Partnership realized net income of $237,000 for the six months ended June 30, 1996, as compared to net income of $741,000 for the six months ended June 30, 1995. The Partnership realized net income of $567,000 for the three months ended June 30, 1996, as compared to net income of $1,301,000 for the three months ended June 30, 1995. Decreases in revenues and expenses can be attributed to the loss of University Park Center Phases I, II and IV in late 1995 and the loss of University Park Center Phase III in 1996. In addition, interest expense decreased due to the $880,000 principal reduction on the second mortgage secured by Springdale Lake Estates Mobile Home Park in 1995 (see discussion below). Property taxes at Springdale Lake Estates Mobile Home Park have decreased due to the assessed value of the property decreasing approximately $400,000 in 1995. The Partnership realized a gain on the foreclosure of University Park Center - Phase III of $741,000, net, in 1996 (see discussion below). The Partnership had a 50% investment in Mesa Dunes and a 57% investment in Fort Worth. As mentioned previously, the Partnership lost its 50% interest in Mesa Dunes on April 1, 1995, as Mesa Dunes foreclosed on its collateral for the note in default. Fort Worth's general partners decided to terminate this joint venture in 1995 after the W.T. Wagoner Building, Fort Worth's remaining property, was sold on March 22, 1995. All remaining cash was used to pay Forth Worth's liabilities in January 1996. Due to the loss of ownership interest in Mesa Dunes and the dissolution of Forth Worth, the Partnership had no equity earnings in joint ventures for the six months ended June 30, 1996, versus equity in income of the joint ventures for the six months ended June 30, 1995 of $1,198,000. The net fair value of University Park Center - Phase III was zero on the date of foreclosure. The recorded net book value of University Park Center - Phase III on the date of foreclosure totaled $435,000. The net gain on foreclosure amounted to $741,000 of which $435,000 represented a loss on transfer of property in foreclosure and $1,176,000 represented a gain on the extinguishment of related debt. The gain on transfer of assets represents the difference between the fair value and the net book value of the property surrendered. The extraordinary gain represents the difference between the settlement amount of the debt and the recorded amount of debt extinguished in the foreclosure. 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 June 30, 1996, the Partnership had unrestricted cash of $106,000 compared to $447,000 at June 30, 1995. Net cash provided by operating activities decreased due to the decreased net income, as discussed above. Net cash used in investing activities increased due to $179,000 in cash transferred upon the foreclosure of University Park Center - Phase III. Net cash used in financing activities remained stable from 1995 to 1996. The accompanying financial statements have been prepared assuming the Partnership will continue as a going concern. The Partnership has incurred recurring operating losses and continues to suffer from inadequate liquidity. It is also in default on $3,720,000 notes payable to AMIT and does not generate sufficient cash flows to meet current operating requirements. In addition, there are limited identified capital resources available to the Partnership. Until November 1995, the Partnership had a recourse first mortgage note payable to AMIT in the amount of $1,800,000 plus accrued interest on University Park Center-Phase IV that was in default due to nonpayment of interest. In May 1995, AMIT initiated foreclosure proceedings and acquired the property in a sheriff's sale, subject of Minnesota law of one year right of redemption, leaving a deficiency judgment. In November 1995, the Partnership granted to AMIT Deeds in Lieu of Foreclosure on University Park Center-Phases I and II and agreed to waive the right of redemption on Phase IV. AMIT also granted a reduction of $880,000 of its second mortgage on Springdale Lakes Estates Mobile Home Park. The Partnership's mortgage of $850,000, secured by University Park Center-Phase III, was in default due to nonpayment of interest. The lender foreclosed on University Park Center - Phase III in 1996. The Partnership has second mortgages totalling $3,720,000 secured by Southgate Village Apartments and Springdale Lake Estates Mobile Home Park. This indebtedness is in default due to nonpayment upon maturity and is recourse to the Partnership. On February 29, 1996, a formal demand for payment of the unpaid principal balance and accrued interest was received from AMIT for the debt secured by Southgate Village Apartments. On June 12, 1996, AMIT filed a Complaint For Foreclosure and Other Relief. The General Partner does not intend to contest the foreclosure and anticipates that this property will be lost in 1997 through foreclosure. On April 11, 1996, a formal demand for payment of the unpaid principal balance and accrued interest was received from AMIT for the debt secured by Springdale Lake Estates Mobile Home Park. The Partnership is presently paying non-debt related expenses of the properties and is current on its two first mortgage notes payable. The General Partner does not have any plans to remedy the liquidity problems the Partnership is currently experiencing; however, it intends to continue to operate the Partnership 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 classification of liabilities that may result from this uncertainty. PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS In July 1993, AMIT initiated litigation against Fort Worth and other partnerships which loaned money to AMIT seeking to avoid repayment of such obligations. 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 was satisfied by a cash payment to Fort Worth by AMIT totalling $1,932,975 (the "Settlement Amount") plus interest at closing. MAE GP, an affiliate of the 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 1.2% 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 1.2% 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. In addition, Liquidity Assistance, LLC, ("LAC"), an affiliate of the General Partner and an affiliate of Insignia Financial Group, Inc., which provides property management and partnership administration services to the Partnership, owns 63,200 Class Shares of AMIT. These Class A Shares entitle LAC to vote approximately 1.5% of the total shares. As part of the settlement, MAE GP granted to AMIT an option to acquire the Class B Shares. 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 would 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. In addition, Angeles, either directly or through an affiliate, maintained a central disbursement account (the "Account") for the properties and partnerships managed by Angeles and its affiliates, including the Registrant. Angeles caused the Partnership to make deposits to the Account ostensibly to fund the payment of certain obligations of the Partnership. Angeles further caused checks on such Account to be written to or on behalf of certain other partnerships. At least $2,286 deposited by or on behalf of the Partnership was used for purposes other than satisfying the liabilities of the Partnership. However, subsequently the General Partner of the Partnership has determined that the cost involved to pursue such claim would likely exceed any amount received, if in fact such claim were to be resolved in favor of the Partnership. Therefore, the Partnership withdrew this claim on August 9, 1995. Finally, the Partnership has filed a Proof of Claim in the bankruptcy proceeding of Angeles concerning the Partnership's indebtedness to AAP. The Proof of Claim alleges that instead of causing the Partnership to pay AAP on account of such debt in the amount of $605,000, Angeles either itself or through an affiliate, caused the Partnership to make payment to another Angeles affiliate. To the extent that such action results in the Partnership not receiving credit for the payments so made, the Partnership would have been damaged in an amount equal to the misappropriated payments. On August 9, 1995, AAP acknowledged constructive receipt of such payment and, therefore, the General Partner withdrew this claim. 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 Partnership is unaware of any other pending or outstanding litigation that is not of a routine nature. The 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. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS 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: 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 INCOME PROPERTIES, LTD. V 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: August 8, 1996 EX-27 2
5 This schedule contains summary financial information extracted from Angeles Income Properties, Ltd. V 1996 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000792181 ANGELES INCOME PROPERTIES LTD. V 1,000 6-MOS DEC-31-1996 JUN-30-1996 106 0 7 0 0 0 9,127 2,363 7,110 0 9,348 0 0 0 (5,549) 7,110 0 829 0 0 1,333 0 627 (939) 0 (939) 0 1,176 0 237 5.22 0 The Registrant has an unclassified balance sheet. Multiplier is 1.
-----END PRIVACY-ENHANCED MESSAGE-----