-----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, B/qHhgyXvQOpG4twPzADW2iLjJfh4UpDpmMteSGUy7NTmgC02Ihhj52Sfx+hR/bo wj3WH+83Vf1u7v73zm7Gew== 0000792181-97-000001.txt : 19970327 0000792181-97-000001.hdr.sgml : 19970327 ACCESSION NUMBER: 0000792181-97-000001 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970326 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: 10KSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-15547 FILM NUMBER: 97563132 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 10KSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB (Mark One) [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the fiscal year ended December 31, 1996 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to Commission file number 0-15547 ANGELES INCOME PROPERTIES, LTD. V California 95-4049903 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) One Insignia Financial Plaza, P.O. Box 1089 29602 Greenville, South Carolina (Zip Code) (Address of principal executive offices) Issuer's telephone number (864) 239-1000 Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: Limited Partnership Units (Title of class) 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] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of Registrant's knowledge in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.[X] State issuer's revenues for its most recent fiscal year. N/A State the aggregate market value of the voting stock held by nonaffiliates of the Registrant. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within the past 60 days. Market value information for Registrant's Partnership Interests is not available. Should a trading market develop for these Interests, it is the Registrant's belief that such trading would not exceed $25 million. DOCUMENTS INCORPORATED BY REFERENCE NONE PART I ITEM 1. DESCRIPTION OF BUSINESS Angeles Income Properties, Ltd. V ("the Partnership" or "Registrant") is a publicly-held limited partnership organized under the California Uniform Limited Partnership Act pursuant to the Certificate and Agreement of Limited Partnership (hereinafter referred to as "the Agreement") dated June 29, 1984. The Partnership's general partner is Angeles Realty Corporation II, a California corporation (hereinafter referred to as the "General Partner" or "ARCII"). The Partnership, through its public offering of Limited Partnership Units, sold 45,450 units aggregating $45,450,000. The General Partner contributed capital in the amount of $1,000 for a 1% interest in the Partnership. The Partnership was formed for the purpose of acquiring fee and other forms of equity interests in various types of real property. The Partnership presently owns one investment property. The Partnership has no full time employees. The General Partner is vested with full authority as to the general management and supervision of the business and affairs of the Partnership. Limited Partners have no right to participate in the management or conduct of such business and affairs. Insignia Residential Group, L.P. provides day-to-day management services for the Partnership's investment property. The business in which the Partnership is engaged is highly competitive, and the Partnership is not a significant factor in its industry. The investment property is located in or near a major urban area and, accordingly, competes for rentals not only with similar properties in its immediate area but with hundreds of similar properties throughout the urban area. Such competition is primarily on the basis of location, rents, services and amenities. In addition, the Partnership competes with significant numbers of individuals and organizations (including similar partnerships, real estate investment trusts and financial institutions) with respect to the sale of improved real properties, primarily on the basis of the prices and terms of such transactions. ITEM 2. DESCRIPTION OF PROPERTIES: The following table sets forth the Registrant's investment in property:
Date of Property Purchase Type of Ownership Use Southgate Village Apts. 06/26/87 Fee ownership, subject to a Residential Rental first and second mortgage 152 units
The Partnership lost Phases I and II of University Park Center via a Deed in Lieu of Foreclosure effective November 17, 1995, and Phase IV was lost through foreclosure effective December 2, 1995. The Partnership lost Phase III of University Park Center and Springdale Lake Estates Mobile Home Park through foreclosure in 1996. 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 nonpayment 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. Finally, 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 will be used to pay Partnership liabilities. As a result, Fort Worth was dissolved effective December 31, 1995 and, therefore, the Partnership lost its 57% interest in Fort Worth. SCHEDULE OF PROPERTIES: (dollar amounts in thousands) Gross Carrying Accumulated Federal Property Value Depreciation Rate Method Tax Basis Southgate Village Apartments $ 3,243 $ -- 5-40 yrs (1) $ 2,776 (1) Straight line See "Note B" of the financial statements included in "Item 7." for a description of the Partnership's depreciation policy. SCHEDULE OF MORTGAGES: (dollar amounts in thousands) Principal Principal Balance At Balance December 31, Interest Period Maturity Due At Property 1996 Rate Amortized Date Maturity Southgate Village Apts. 1st mortgage $ 2,614 10.63% 25 years 01/2006 $ 1,977 2nd mortgage, in default (1) 2,000 11.50% (2) 03/1995 2,000 Angeles Income Properties, Ltd. V Note payable (4) 198 (3) (2) 11/1997 198 Total $ 4,812 $ 4,175 (1) Loan provided by Angeles Mortgage Investment Trust ("AMIT"), interest currently accruing at 18%. (2) Interest only payments. (3) Prime rate plus 2%. (4) Loan provided by Angeles Acceptance Pool, L.P. ("AAP"). Average annual rental rate and occupancy for 1996 and 1995 for the investment property is as follows: Average Annual Average Annual Rental Rates Occupancy Property 1996 1995 1996 1995 Southgate Village Apts. $5,604/unit$5,356/unit 93% 92% As noted under "Item 1. Description of Business", the real estate industry is highly competitive. The property is subject to competition from other residential apartment complexes in the area. The General Partner believes that the property is adequately insured. The multi-family residential property's lease terms are for one year or less. No residential tenant leases 10% or more of the available rental space. Real estate taxes and rates in 1996 are as follows: (dollar amounts in thousands) 1996 1996 Billing Rate Southgate Village Apts. $ 71 6.05 ITEM 3. 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 totaling $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% 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 39% 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 1.3% 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 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. ("Insignia"), which provides property management and partnership administration services to the Partnership, owns 126,500 Class A Shares of AMIT at December 31, 1996. As of February 1, 1997, the number of shares owned by LAC decreased to 96,800. These Class A Shares entitle LAC to vote approximately 2.2% of the total shares. In addition, Insignia has engaged and continues to engage in discussions with AMIT regarding various potential business combinations with affiliates of Insignia. 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 Corporation ("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. 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 has a second mortgage in the amount of $2,000,000 which is secured by Southgate Village Apartments. 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. 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. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Unit holders of the Partnership did not vote on any matter during the fourth quarter of the fiscal year covered by this report. PART II ITEM 5. MARKET FOR THE PARTNERSHIP'S COMMON EQUITY AND RELATED SECURITY HOLDER MATTERS The Partnership, a publicly-held limited partnership, sold 45,450 Limited Partnership Units during its offering period through June 10, 1987, and currently has 44,421 Limited Partnership Units outstanding and 3,801 Limited Partners of record. There is no intention to sell additional Limited Partnership Units nor is there an established market for these units. During the year, the number of Limited Partnership Units decreased by 600 units. In abandoning his or her Limited Partnership Units, a Limited Partner relinquishes all right, title and interest in the Partnership as of the date of abandonment (see "Note J" of the financial statements included in "Item 7."). ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION RESULTS OF OPERATIONS, LIQUIDITY, AND CAPITAL RESOURCES As of July 1, 1996, the Partnership adopted the liquidation basis of accounting. The Partnership has significant recurring operating losses and continues to suffer from inadequate liquidity. The Partnership is in default on recourse indebtedness totaling $2,000,000 due 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. The Partnership has a second mortgage in the amount of $2,000,000 which is secured by Southgate Village Apartments. 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 Partnership entered into a forbearance agreement with AMIT, effective July 1, 1996, which provides that surplus cash be deposited into a separate account on which the Partnership has granted AMIT a first priority lien. In exchange, AMIT agrees to refrain from appointing a receiver for the property. The General Partner does not intend to contest the foreclosure and anticipates that this property will be lost in 1997 through foreclosure. The Partnership is presently paying non-debt related expenses and is current on its first mortgage note payable. However, the debt to AAP matures in November 1997 and the Partnership does not have the ability to satisfy the indebtedness when it becomes due. The General Partner believes the equity in Southgate Village Apartments is not sufficient to retire the AMIT debt, therefore, the General Partner expects to transfer the Partnership's interest in Southgate Village Apartments to AMIT. These transactions are anticipated to occur during the fourth quarter of 1997. The Partnership does not expect to contest any of these proceedings. The General Partner does not have any other plans to remedy the liquidity problems the Partnership is experiencing. The Partnership does not intend to purchase any additional properties and the General Partner has decided to terminate the Partnership upon foreclosure of the final property. As a result of the decision to liquidate the Partnership, the Partnership changed its basis of accounting for its financial statements on July 1, 1996, from the going concern basis of accounting to the liquidation basis of accounting in accordance with generally accepted accounting principles. Consequently, assets have been valued at estimated realizable value (including subsequent actual transactions described below) 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 General Partner's estimates as of the date of the financial statements. For the six months ended December 31, 1996, the Partnership recorded a net decrease in net liabilities in liquidation of approximately $85,000. Contributing to the decrease in net liabilities in liquidation was a decrease in estimated net costs during liquidation. The statements of consolidated net liabilities in liquidation as of December 31, 1996, include approximately $631,000 of costs, net of income, that the General Partner estimates will be incurred during the period of liquidation based upon the assumption that the liquidation process will be completed by December 31, 1997. These costs include anticipated legal fees, administrative expenses, and loss from property operations. Because the success in realization of assets and the settlement of liabilities is based on the General Partner's best estimates, the liquidation period may be shorter than projected or it may be extended beyond the projected period. ITEM 7. FINANCIAL STATEMENTS ANGELES INCOME PROPERTIES, LTD. V LIST OF FINANCIAL STATEMENTS Independent Auditors' Report Statement of Net Liabilities in Liquidation - December 31, 1996 Statement of Changes in Net Liabilities in Liquidation - Six months ended December 31, 1996 Statement of Operations - Six months ended June 30, 1996 Statement of Operations - Year ended December 31, 1995 Statement of Changes in Partners' Deficit - Year ended December 31, 1995 and six months ended June 30, 1996 Statement of Cash Flows - Six months ended June 30, 1996 Statement of Cash Flows - Year ended December 31, 1995 Notes to Financial Statements Report of Ernst & Young LLP, Independent Auditors The Partners Angeles Income Properties, Ltd. V We have audited the statement of net liabilities in liquidation of Angeles Income Properties, Ltd. V as of December 31, 1996 and the related statement of changes in net liabilities in liquidation for the six months ended December 31, 1996, which have been prepared on the liquidation basis of accounting. In addition, we have audited the statements of operations, changes in partners' deficit and cash flows for the year ended December 31, 1995 and the six months ended June 30, 1996, which were prepared on the going concern basis of accounting. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Partnership's management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. The statements of operations, changes in partners' deficit and cash flows for the year ended December 31, 1995 and the six months ended June 30, 1996 were prepared assuming that Angeles Income Properties, Ltd. V would continue as a going concern. As more fully described in Note A, the Partnership has incurred recurring operating losses, has defaulted on certain indebtedness and has been unable to generate sufficient cash flows to meet current operating requirements. Formal demands for payment of its indebtedness in default have been received. The Partnership lost three investment properties through foreclosure in 1995 and two in 1996. These conditions raised substantial doubt about the Partnership's ability to continue as a going concern at December 31, 1995. Due to the imminent disposal of its remaining investment properties, the General Partner decided, effective July 1, 1996, to liquidate the Partnership. As a result, the Partnership changed its basis of accounting as of July 1, 1996 from a going concern basis to a liquidation basis. In our opinion, the statement of net liabilities in liquidation as of December 31, 1996 and the related statement of changes in net liabilities in liquidation for the six months ended December 31, 1996 present fairly, in all material respects, the net liabilities in liquidation of Angeles Income Properties, Ltd. V as of December 31, 1996, and the changes in net liabilities in liquidation for the six months ended December 31, 1996, in conformity with generally accepted accounting principles applied on the basis of accounting described in Note A to the financial statements. Because of the possible material effects of the matters described above, we are unable to, and do not, express an opinion on the statements of operations, changes in partners' deficit and cash flows for the year ended December 31, 1995 and the six months ended June 30, 1996. /S/ ERNST & YOUNG LLP Greenville, South Carolina February 18, 1997 ANGELES INCOME PROPERTIES, LTD. V STATEMENT OF NET LIABILITIES IN LIQUIDATION (in thousands) December 31, 1996 Assets Cash and cash equivalents: Unrestricted $ 135 Restricted--tenant security deposits 17 Accounts receivable 7 Escrow for taxes 41 Investment property (Notes A and I) 3,243 3,443 Liabilities Accounts payable 25 Tenant security deposits 27 Accrued interest (Note G) 1,700 Other liabilities 72 Mortgage notes payable, $2,000 in default (Notes A,E,G and I) 4,812 Estimated costs during the period of liquidation (Note A) 631 7,267 Net liabilities in liquidation (Note A) $ (3,824) See Accompanying Notes to Financial Statements ANGELES INCOME PROPERTIES, LTD. V STATEMENT OF CHANGES IN NET LIABILITIES IN LIQUIDATION (in thousands) December 31, 1996 Partner's deficit at June 30, 1996 $ (5,548) Adjustment to liquidation basis of accounting (Note C) 1,809 Net liabilities in liquidation at July 1, 1996 (3,739) Changes in net liabilities in liquidation attributed to: Increase in unrestricted cash 29 Decrease in restricted cash (43) Decrease in escrows for taxes (47) Decrease in investment properties (3,559) Increase in accounts payable (8) Decrease in tenant security deposits 34 Increase in accrued interest (697) Decrease in other liabilities 13 Decrease in mortgage notes payable 3,557 Decrease in estimated costs during the period of liquidation 636 Net liabilities in liquidation at December 31, 1996 $ (3,824) See Accompanying Notes To Financial Statements ANGELES INCOME PROPERTIES, LTD. V STATEMENT OF OPERATIONS (in thousands, except unit data) Six Months Ended June 30, 1996 Revenues: Rental income $ 729 Other income 100 Total revenues 829 Expenses: Operating 347 General and administrative 111 Maintenance 64 Depreciation 121 Interest 627 Bad debt recovery, net (1) Property taxes 64 Total expenses 1,333 Loss before extraordinary gain (504) Extraordinary gain - extinguishment of debt (Note D) 741 Net income $ 237 Net income allocated to general partner (1%) $ 2 Net income allocated to limited partners (99%) 235 Net income $ 237 Per limited partnership unit: (Loss) income before extraordinary item $ (11.08) Extraordinary item 16.30 Net income $ 5.22 See Accompanying Notes to Financial Statements ANGELES INCOME PROPERTIES, LTD. V STATEMENT OF OPERATIONS (in thousands, except unit data) Year Ended December 31, 1995 Revenues: Rental income $ 2,510 Other income 71 Total revenues 2,581 Expenses: Operating 839 General and administrative 310 Maintenance 246 Depreciation 363 Interest 2,073 Property taxes 385 Bad debt expense 54 Total expenses 4,270 Loss before equity in income of joint ventures, gain on transfer of property in foreclosure and extraordinary gain (1,689) Equity in income of joint venture (Note H) 4,080 Gain on transfer of property in foreclosure (Note D) 313 Income before extraordinary item 2,704 Extraordinary gain - forgiveness of debt (Note D) 1,930 Net income $ 4,634 Net income allocated to general partner (1%) $ 46 Net income allocated to limited partners (99%) 4,588 Net income $ 4,634 Per limited partnership unit: Income before extraordinary item $ 59.46 Extraordinary gain 42.44 Net income $ 101.90 See Accompanying Notes to Financial Statements ANGELES INCOME PROPERTIES, LTD. V STATEMENT OF CHANGES IN PARTNERS' DEFICIT (in thousands, except unit data) Limited Partnership General Limited Units Partner Partners Total Original capital contributions 45,450 $ 1,000 $ 45,450 $ 45,451 Partners' deficit at December 31, 1994 45,021 $ (494) $ (9,925) $ (10,419) Net income for the year ended December 31, 1995 -- 46 4,588 4,634 Partners' deficit at December 31, 1995 45,021 (448) (5,337) (5,785) Abandonment of limited partnership units (Note J) (600) -- -- -- Net income for the six months ended June 30, 1996 -- 2 235 237 Partners' deficit at June 30, 1996 44,421 $ (446) $ (5,102) $ (5,548) See Accompanying Notes to Financial Statements ANGELES INCOME PROPERTIES, LTD. V STATEMENT OF CASH FLOWS (in thousands) Six Months Ended June 30, 1996 Cash flows from operating activities: Net income $ 237 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 121 Amortization of loan costs and leasing commission 9 Bad debt recovery, net (1) Extraordinary gain on extinguishment of debt (741) Change in accounts: Restricted cash 7 Accounts receivable 11 Escrows for taxes 11 Accounts payable (26) Tenant security deposit liabilities 4 Accrued interest 354 Due to affiliates 77 Other liabilities (14) Net cash provided by operating activities 49 Cash flows used in investing activities: Cash transferred upon foreclosure (179) Property improvements and replacements (17) Net cash used in investing activities (196) Cash flows used in financing activities: Payments on mortgage notes payable (40) Net decrease in cash (187) Cash and cash equivalents at December 31, 1995 293 Cash and cash equivalents at June 30, 1996 $ 106 Supplemental disclosure of cash flow information: Cash paid for interest $ 263 See Accompanying Notes to Financial Statements ANGELES INCOME PROPERTIES, LTD. V STATEMENTS OF CASH FLOWS SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES Foreclosures During the six months ended June 30, 1996, the Partnership 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: (in thousands) Other assets $ (2) Investment properties (435) Accounts payable and other liabilities 113 Accrued interest 394 Mortgage notes payable 850 See Accompanying Notes to Financial Statements ANGELES INCOME PROPERTIES, LTD. V STATEMENT OF CASH FLOWS (in thousands) Year Ended December 31, 1995 Cash flows from operating activities: Net income $ 4,634 Adjustments to reconcile net income to net cash provided by operating activities: Equity in income of joint ventures (4,080) Depreciation 363 Amortization of loan costs and leasing commissions 77 Bad debt expense 54 Extraordinary gain-forgiveness of debt (1,930) Gain on transfer of property in foreclosure (313) Change in accounts: Restricted cash (23) Accounts receivable (67) Escrows for taxes (55) Other assets (68) Accounts payable (154) Tenant security deposit liabilities 1 Accrued taxes 87 Accrued interest 1,383 Due to affiliates 124 Other liabilities 132 Net cash provided by operating activities 165 Cash flows used in investing activities: Property improvements and replacements (98) Cash flows used in financing activities: Payments on mortgage notes payable (74) Net decrease in cash (7) Cash and cash equivalents at December 31, 1994 300 Cash and cash equivalents at December 31, 1995 $ 293 Supplemental disclosure of cash flow information Cash paid for interest $ 634 See Accompanying Notes to Financial Statements ANGELES INCOME PROPERTIES, LTD. V STATEMENTS OF CASH FLOWS SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES Foreclosures On April 1, 1995, the Partnership lost its interest in Mesa Dunes as Mesa Dunes foreclosed on its collateral. In November 1995 the Partnership granted Deeds in Lieu of Foreclosure on University Park Center - Phases I, II, and IV (See "Note D"). In connection with these non-cash transactions the following accounts were adjusted: (in thousands) Accounts receivable $ (38) Other assets (228) Investment in joint venture (6,118) Investment properties (1,768) Accounts payable and other accrued liabilities 150 Accrued taxes 106 Accrued interest 2,459 Notes payable 7,680 See Accompanying Notes to Financial Statements ANGELES INCOME PROPERTIES, LTD. V NOTES TO FINANCIAL STATEMENTS December 31, 1996 NOTE A - BASIS OF PRESENTATION As of July 1, 1996, the Partnership adopted the liquidation basis of accounting. The Partnership has significant recurring operating losses and continues to suffer from inadequate liquidity. The Partnership is in default on recourse indebtedness and does not generate sufficient cash flows to meet current operating requirements. In addition, there are no other capital resources available to the Partnership. Until November 1995, the Partnership had a recourse first mortgage note payable to Angeles Mortgage Investment Trust ("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 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 Phase I and II and agreed to waive the right of redemption on Phase IV. The Partnership had a non-recourse mortgage of $850,000 secured by University Park Center - Phase III which was in default due to nonpayment of interest. The lender foreclosed on University Park Center - Phase III in 1996. The Partnership had a nonrecourse second mortgage note payable to AMIT, in the amount of $1,720,000 plus accrued interest secured by Springdale Lake Estates Mobile Home Park that was in default due to nonpayment upon maturity. 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. AMIT foreclosed on the property on August 15, 1996. The Partnership has a second mortgage payable to AMIT in the amount of $2,000,000 which is secured by Southgate Village Apartments. 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 Partnership entered into a forbearance agreement with AMIT, effective July 1, 1996, which provides that surplus cash be deposited into a separate account on which the Partnership has granted AMIT a first priority lien. In exchange, AMIT agrees to refrain from appointing a receiver for the property. The General Partner does not intend to contest the foreclosure and anticipates that this property will be lost in 1997 through foreclosure. The Partnership is presently paying non-debt related expenses of the property and is current on its first mortgage note payable. However, the debt to Angeles Acceptance Pool, L.P. ("AAP") matures in November 1997 and the Partnership does not have the ability to satisfy the indebtedness when it is due. At this time, the General Partner believes the equity in Southgate Village Apartments is not sufficient to retire the AMIT debt, therefore, the General Partner expects to transfer the Partnership's interest in Southgate Village Apartments to AMIT. These transactions are anticipated to occur during the fourth quarter of 1997. The General Partner does not expect to contest any of these proceedings. The General Partner does not have any other plans to remedy the liquidity problems the Partnership is experiencing. The Partnership does not intend to purchase any additional properties and the General Partner has decided to terminate the Partnership upon foreclosure of the final property. As a result of the decision to liquidate the Partnership, the Partnership changed its basis of accounting for its financial statements on July 1, 1996, from the going concern basis of accounting to the liquidation basis of accounting in accordance with generally accepted accounting principles. Consequently, assets have been valued at estimated realizable value (including subsequent actual transactions described below) 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 General Partner's estimates as of the date of the financial statements. The statement of net liabilities in liquidation as of December 31, 1996, include $631,000 of costs, net of income, that the General Partner estimates will be incurred during the period of liquidation based upon the assumption that the liquidation process will be completed by December 31, 1997. These costs include anticipated legal fees, administrative expenses, and loss from property operations. Because the success in realization of assets and the settlement of liabilities is based on the General Partner's best estimates, the liquidation period may be shorter than projected or it may be extended beyond the projected period. NOTE B - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization: Angeles Income Properties, Ltd. V (the "Partnership") is a California limited partnership organized on June 29, 1984, to acquire and operate residential and commercial real estate properties. The Partnership's General Partner is Angeles Realty Corporation II ("ARC II"), an affiliate of Insignia Financial Group, Inc. As of December 31, 1996, the Partnership operates one residential property located in Bedford Heights, Ohio. Allocations and Distributions to Partners: In accordance with the Partnership Agreement, any gain from the sale or other disposition of Partnership assets will be allocated first to the General Partner to the extent of the amount of any Brokerage Compensation and Incentive Interest to which the General Partner is entitled. Any gain remaining after said allocation will be allocated to the General Partner and Limited Partners in proportion to their interests in the Partnership. The Partnership will allocate other profits and losses 1% to the General Partner and 99% to the Limited Partners. Except as discussed below, the Partnership will allocate distributions 1% to the General Partner and 99% to the Limited Partners. Upon the sale or other disposition, or refinancing, of any asset of the Partnership, the Distributable Net Proceeds shall be distributed as follows: (i) First, to the Partners in proportion to their interests until the Limited Partners have received proceeds equal to their Original Capital Investment applicable to the property; (ii) Second, to the Partners until the Limited Partners have received distributions from all sources equal to their 6% Cumulative Distribution; (iii) Third, to the General Partner until it has received an amount equal to 3% of the aggregate Disposition Prices of all properties or investments sold (Initial Incentive Interest); (iv) Fourth, to the Partners in proportion to their interests until the Limited Partners have received distributions from all sources equal to their additional 8% Cumulative Distribution; and (v) Thereafter, 76% to the Limited Partners in proportion to their interests and 24% ("Final Incentive Interest") to the General Partner. Investment in Joint Ventures: The Partnership accounted for its 50% investment in Mesa Dunes Wokonda and Town & Country Partners ("Mesa Dunes") and its 57% investment in Angeles Fort Worth Option Joint Venture ("Fort Worth") using the equity method of accounting. Under the equity method, the Partnership recorded its equity interest in earnings or losses of the joint ventures; however, the investment in the joint ventures would be recorded at an amount less than zero (a liability) only to the extent of the Partnership's share of net liabilities of the joint ventures. Depreciation: Depreciation was provided by accelerated and straight-line methods over the estimated lives of the investment properties and related personal property through June 30, 1996. No depreciation was recorded subsequent to June 30, 1996, under the liquidation basis of accounting. For Federal income tax purposes, depreciation is computed by using the straight-line method over an estimated life of 5 to 20 years for personal property and 15 to 40 years for real property. Cash and Cash Equivalents: The Partnership considers all highly liquid investments with a maturity when purchased of three months or less to be cash equivalents. At certain times, the amount of cash deposited at a bank may exceed the limit on insured deposits. Investment Properties: Prior to the fourth quarter of 1995, investment properties were carried at the lower of cost or estimated fair value, which was determined using the higher of the property's non-recourse debt amount, when applicable, or the net operating income of the investment property capitalized at a rate deemed reasonable for the type of property. During the fourth quarter of 1995 the Partnership adopted "FASB Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. The impairment loss is measured by comparing the fair value of the asset to its carrying amount. The effect of adoption was not material. As a result of the Partnership adopting the liquidation basis of accounting, the investment property was adjusted to its estimated net realizable value. The effect of adoption was not material. As a result of the Partnership adopting the liquidation basis of accounting, the investment properties were adjusted to their estimated net realizable values. Amortization: Loan costs were being amortized on a straight-line basis over the life of the loans. At July 1, 1996, $85,000 of unamortized loan costs were written off in the adjustment to liquidation basis of accounting because the Partnership determined that these intangible assets no longer have value. Leases: The partnership generally leases apartment units for twelve-month terms or less. Tenant Security Deposits: The Partnership requires security deposits from all apartment lessees for the duration of the lease. Deposits are refunded when the tenant vacates the apartment if there has been no damage to the unit. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Reclassifications: Certain reclassifications have been made to the 1995 balances to conform to the 1996 presentation. NOTE C - ADJUSTMENT TO LIQUIDATION BASIS OF ACCOUNTING At July 1, 1996, in accordance with the liquidation basis of accounting, assets were adjusted to their estimated net realizable value and liabilities were adjusted to their settlement amount and include all estimated costs associated with carrying out the liquidation. The net adjustment required to convert to the liquidation basis of accounting was a decrease in net liabilities of $1,809,000. Significant adjustments in 1996 are summarized as follows: (Increase) Decrease in net liabilities (in thousands) Adjustment from book value of property improvements to estimated net realizable value $ 38 Adjustment to record estimated costs during the period of liquidation (1,267) Adjustment of debt to net settlement value 979 Adjustment for other assets and liabilities 2,059 Net decrease in net liabilities $ 1,809 NOTE D - GAIN ON EXTINGUISHMENT OF DEBT AND FORECLOSURE OF PROPERTIES The Partnership had a note payable to Mesa Dunes in the amount of $5,000,000 plus accrued interest collateralized by its 50% ownership interest in Mesa Dunes. This note was in default due to failure to perform under the terms and conditions of the note, including failure to make interest payments when due. In December 1994, Mesa Dunes formally notified the Partnership that the note was in default. In February 1995, Mesa Dunes gave notice that it intended to foreclose on its collateral. On April 1, 1995 Mesa Dunes foreclosed and the Partnership lost its interest in Mesa Dunes. Upon the foreclosure the Partnership recognized an extraordinary gain on the extinguishment of debt of $497,000, which represented the difference between its investment in Mesa Dunes and the debt extinguished pursuant to the foreclosure. 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 for $2,175,000, subject to Minnesota law of one year right of redemption, leaving a deficiency judgment against the Partnership of $451,000. 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. These Deeds in Lieu of Foreclosure were used to satisfy the $451,000 deficiency. AMIT also granted a reduction of $880,000 of its second mortgage on Springdale Lake Estates Mobile Home Park. The net fair value and the recorded net book value of the properties lost on the date of foreclosure totaled $2,081,000 and $1,768,000, respectively. The net gain on foreclosure amounted to $1,746,000, of which $313,000 represented a gain on transfer of property in foreclosure and $1,433,000 represented a gain on the extinguishment of related debt. The gain on transfer of assets represents the difference between 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 the debt extinguished in the foreclosure. The Partnership had a nonrecourse fist mortgage in the amount of $850,000 plus accrued interest on University Park Center Phase III that was in default due to nonpayment. In 1995, the lender initiated foreclosure proceedings on this property. During the six months ended June 30, 1996, the lender foreclosed on the property in full satisfaction of the debt. The Partnership recognized an extraordinary gain on the extinguishment of debt of $741,000. NOTE E - NOTES PAYABLE The principal terms of notes payable are as follows: (dollar amounts in thousands) Monthly Principal Principal Payment Stated Balance Balance At Including Interest Maturity Due At December 31, Interest Rate Date Maturity 1996 Southgate Village Apts. 1st mortgage $ 26 10.63% 01/2006 $ 1,977 $ 2,614 2nd mortgage, in default (1) 19 11.5% 03/1995(2) 2,000 2,000 Angeles Income Properties, Ltd. V Note payable (4) (2) (3) 11/1997(2) 198 198 $ 45 $ 4,175 $ 4,812 (1) Loan provided by AMIT, interest currently accruing at 18% (See "Note G"). (2) Interest only payments. (3) Prime rate plus 2%. (4) Loan from AAP (see "Note G"). The mortgage note payable is secured by pledge of the Partnership's rental property and by pledge of revenues from the respective rental property. The mortgage note secured by Southgate Village Apartments requires a prepayment penalty if repaid prior to maturity. Scheduled principal payments of notes payable subsequent to December 31, 1996, are as follows: (dollar amounts in thousands) 1997 $ 2,243 1998 50 1999 55 2000 61 2001 68 Thereafter 2,335 $ 4,812 NOTE F - INCOME TAXES Taxable income or loss of the Partnership is reported in the income tax returns of its partners. Accordingly, no provision for income taxes is made in the financial statements of the Partnership. Differences between the net loss as reported and Federal taxable loss result primarily from (1) investments in joint venture differences, (2) foreclosure of investment properties, (3) reserve for bad debts, and (4) depreciation over different methods and lives and on differing cost basis of investment properties. For the year ended December 31, 1996, the Federal taxable income was $649,000, or $14.54 per limited partnership unit. The following is a reconciliation of reported net loss and Federal taxable loss for 1995: (dollar amounts in thousands) 1995 Net income/(loss) as reported $ 4,634 Add (deduct): Depreciation differences (141) Unearned income (6) Foreclosure of investment properties (4,159) Investments in joint venture differences (8,823) Bad debt expense (108) Accrued audit 6 Federal taxable loss $ (8,597) Federal taxable loss per limited partnership unit $ (189.04) The following is a reconciliation between the Partnership's reported amounts and Federal tax basis of net assets and liabilities: 1996 Net liabilities in liquidation, as reported $ (3,824) Land and buildings (618) Accumulated depreciation 151 Syndication and distribution costs 6,344 Accruals (351) Net assets - Federal tax basis $ 1,702 NOTE G - 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 in 1995 and 1996: (dollar amounts in thousands) 1996 1995 Property management fees $ 70 $ 96 Reimbursement for services of affiliates 155 226 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, 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"). 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 December 31, 1996, 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 the remaining property owned by the Partnership, or iii) November 25, 1997. Total interest incurred for this loan was $20,000 and $21,000 for the year ended December 31, 1996 and 1995, respectively. Accrued interest was $80,000 at December 31, 1996. AMIT currently provides financing to the Partnership in the total principal amount of $2,000,000 secured by Southgate Village Apartments. This debt is in default at December 31, 1996. Total interest incurred on this financing was $1,085,000 and $697,000 for the year ended December 31, 1996 and 1995, respectively. Accrued interest was $1,595,000 at December 31, 1996. 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% 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 39% 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 1.3% 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 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. 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., ("Insignia") which provides property management and partnership administration services to the Partnership, owns 126,500 Class A Shares of AMIT at December 31, 1996. As of February 1, 1997, the number of shares owned by LAC decreased to 96,800. These Class A Shares entitle LAC to vote approximately 2.2% of the total shares. In addition, Insignia has engaged and continues to engage in discussions with AMIT regarding various potential business combinations with affiliates of Insignia. 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 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 H - INVESTMENT IN JOINT VENTURES 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. In 1995 the Partnership recognized $183,000 as its equity interest in the earnings of Mesa Dunes up to the date it lost its investment. Fort Worth's general partners decided to terminate this joint venture in 1995 after the W.T. Waggoner Building, Fort Worth's remaining property, was sold on March 22, 1995. All remaining cash was used to pay Fort Worth's liabilities in January 1996, at which time the joint venture was dissolved. 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 condensed profit and loss statements of Fort Worth at December 31, 1995, is as follows: (dollar amounts in thousands) Revenue $ 207 Costs and expenses (461) Bad debt recovery 1,933 Extraordinary gain-forgiveness of debt 5,174 Net income $ 6,853 NOTE I - INVESTMENT PROPERTY AND ACCUMULATED DEPRECIATION Initial Cost To Partnership Cost Buildings Capitalized and Related (Removed) Personal Subsequent to Description Encumbrances Land Property Acquisition Southgate Village Apts. $ 4,614 $ 269 $ 3,095 $ (121) Angeles Income Properties, Ltd. V 198 -- -- -- Totals $ 4,812 $ 269 $ 3,095 $ (121)
Gross Amount At Which Carried At December 31, 1996 Buildings And Related Personal Accumulated Date Depreciable Description Land Property Total Depreciation Acquired Life-Years Southgate Village Apts. $ 269 $ 2,974 $ 3,243 $ -- 06/26/87 10-40
The depreciable lives included above are for the buildings and components. The depreciable lives for related personal property are for 5 to 7 years. Reconciliation of "Investment Properties and Accumulated Depreciation": Years Ended December 31, 1996 1995 Investment Properties Balance at beginning of year $ 9,818 $ 12,623 Property improvements 17 98 Disposal of property (4,267) (2,903) Adjustment due to liquidation (2,325) -- Balance at end of year $ 3,243 $ 9,818 Accumulated Depreciation Balance at beginning of year $ 2,515 $ 3,286 Additions charged to expense 121 363 Disposal of property (273) (1,134) Adjustment due to liquidation (2,363) -- Balance at end of year $ -- $ 2,515 The aggregate cost of the real estate for Federal income tax purposes at December 31, 1996 and 1995 is $3,706,000 and $10,997,000. The accumulated depreciation taken for Federal income tax purposes at December 31, 1996 and 1995 is $930,000 and $3,225,000. NOTE J - ABANDONMENT OF LIMITED PARTNERSHIP UNITS In 1996, the number of Limited Partnership Units decreased by 600 units, due to limited partners abandoning their units. In abandoning his or her Limited Partnership Unit, a limited partner relinquishes all right, title and interest in the Partnership as of the date of abandonment. However, during the year of abandonment, the Limited Partner will still be allocated his or her share of the income or loss. The income per Limited Partnership Unit in the accompanying Statements of Operations is calculated based on the number of units outstanding at the beginning of the year. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND FINANCIAL DISCLOSURES There were no disagreements with Ernst & Young LLP regarding the 1996 or 1995 audits of the Partnership's financial statements. PART III ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT The names of the directors and executive officers of Angeles Realty Corporation II ("ARC II"), the Partnership's General Partner as of December 31, 1996, their age and the nature of all positions with ARC II presently held by them are as follows: Name Age Office Carroll D. Vinson 56 President, Director Robert D. Long, Jr. 29 Controller, Principal Accounting Officer William H. Jarrard, Jr. 50 Vice President John K. Lines, Esq. 37 Vice President and Secretary Kelley M. Buechler 39 Assistant Secretary Carroll D. Vinson has been President of Metropolitan Asset Enhancement, L.P., and subsidiaries since August of 1994. Prior to that, during 1993 to August 1994, Mr. Vinson was affiliated with Crisp, Hughes & Co. (regional CPA firm) and engaged in various other investment and consulting activities. Briefly, in early 1993, Mr. Vinson served as President and Chief Executive Officer of Angeles Corporation, a real estate investment firm. From 1991 to 1993, Mr. Vinson was employed by Insignia in various capacities including Managing Director-President during 1991. From 1986 to 1990, Mr. Vinson was President and a Director of U.S. Shelter Corporation, a real estate services company, which sold substantially all of its assets to Insignia in December 1990. Robert D. Long, Jr. is Controller and Principal Accounting Officer. Prior to joining Metropolitan Asset Enhancement, L.P., he was an auditor for the State of Tennessee and was associated with the accounting firm of Harshman Lewis and Associates. He is a graduate of the University of Memphis. William H. Jarrard, Jr. has been Managing Director - Partnership Administration of Insignia since January 1991. Mr. Jarrard served as Managing Director - Partnership Administration & Asset Management from July 1994 until January 1996. John K. Lines, Esq. has been Insignia's General Counsel since June 1994 and General Counsel and Secretary since July 1994. From May 1993 until June 1994, Mr. Lines was the Assistant General Counsel and Vice President of Ocwen Financial Corporation, West Palm Beach, Florida. From October 1991 until May 1993, Mr. Lines was a Senior Attorney with BANC ONE CORPORATION, Columbus, Ohio. From May 1984 until October 1991, Mr. Lines was an attorney with Squire Sanders & Dempsey, Columbus, Ohio. Kelley M. Buechler is Assistant Secretary of the General Partner and has served as Assistant Secretary of Insignia since 1991. ITEM 10. EXECUTIVE COMPENSATION No direct form of compensation or remuneration was paid by the Partnership to any officer or director of ARC II. The Partnership has no plan, nor does the Partnership presently propose a plan, which will result in any remuneration being paid to any officer or director upon termination of employment. However, fees and other payments have been made to the Partnership's General Partner and its affiliates, as described in "Note G" of the Financial Statements included under "Item 7.", which is incorporated herein by reference. ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT As of January 1, 1997, no person owned of record more than 5% of the Limited Partnership Units of the Partnership nor was any person known by the Partnership to own of record and beneficially, or beneficially only, more than 5% of such securities. The Partnership knows of no contractual arrangements, the operation of the terms of which may at a subsequent date result in a change in control of the Partnership, except for: Article 12.1 of the Agreement, which provides that upon a vote of the Limited Partners holding more than 50% of the then outstanding Limited Partnership Units the General Partner may be expelled from the Partnership upon 90 days written notice. In the event that the successor general partner has been elected by Limited Partners holding more than 50% of the then outstanding Limited Partnership Units and if said Limited Partners elect to continue the business of the Partnership, the Partnership is required to pay in cash to the expelled General Partner an amount equal to the accrued and unpaid management fee described in Article 10 of the Agreement and to purchase the General Partner's interest in the Partnership on the effective date of the expulsion, which shall be an amount equal to the difference between (i) the balance of the General Partner's capital account and (ii) the fair market value of the share of Distributable Net Proceeds to which the General Partner would be entitled. Such determination of the fair market value of the share of Distributable Net Proceeds is defined in Article 12.2(b) of the Agreement. ITEM 12 . CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS No transactions have occurred between the Partnership and any officer or director of ARC II. During the year ended December 31, 1996, the transactions that occurred between the Partnership and ARC II and affiliates of ARC II pursuant to the terms of the Agreement are disclosed under "Note G" of the Partnerships' Financial Statements included under "Item 7.", which is hereby incorporated by reference. PART IV ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits required by Item 601 of Regulation S-B: Refer to Exhibit Index. (b) Reports on Form 8-K: None filed for the quarter ended December 31, 1996. SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ANGELES INCOME PROPERTIES, LTD. V (A California Limited Partnership) (Registrant) By: Angeles Realty Corporation II By: /s/Carroll D. Vinson Carroll D. Vinson President Date: March 26, 1997 In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities on the date indicated. /s/Carroll D. Vinson President Date: March 26, 1997 Carroll D. Vinson /s/Robert D. Long, Jr. Controller Date: March 26, 1997 Robert D. Long, Jr. and Principal Accounting Officer EXHIBIT INDEX Exhibit Number Description of Exhibit 3.1 Amended Certificate and Agreement of the Limited Partnership filed in the Partnership's Prospectus dated June 11, 1986 which is incorporated herein by reference. 10.1 Promissory Note - Fort Worth Center and the W.T. Waggoner Building filed in Form 8-K dated July 16, 1986 is incorporated herein by reference. 10.2 Deed of Trust, Assignment of Leases and Rents and Security Agreement - Fort Worth Center and the W.T. Waggoner Building filed in Form 8-K dated July 16, 1986 which is incorporated herein by reference. 10.3 Deed of Trust - Option - Fort Worth Center and the W.T. Waggoner Building filed in Form 8-K dated July 16, 1986 which is incorporated herein by reference. 10.4 Security Agreement - Fort Worth Center and the W.T. Waggoner Building filed in Form 8-K dated July 16, 1986 which is incorporated herein by reference. 10.5 Option Agreement - Fort Worth Center and the W.T. Waggoner Building filed in Form 8-K dated July 16, 1986 which is incorporated herein by reference. 10.6 Agreement of Purchase and Sale of Real Property with Exhibits - Springdale Lake Estates Mobile Home Park filed in Form 8-K dated December 31, 1986 which is incorporated herein by reference. 10.7 Agreement of Purchase and Sale of Property with Exhibits - Southgate Village Apartments filed in Form 8-K dated June 26, 1987 which is incorporated herein by reference. 10.8 Agreement fo Purchase and Sale of Property with Exhibits - University Park Center filed in Form 8-K dated June 29, 1987 which is incorporated herein by reference. 10.9 Agreement of Purchase and Sale of Property with Exhibits - Mesa Dunes Mobile Home Park filed in Form 8-K dated December 23, 1987 which is incorporated herein by reference. 10.10 Beneficiary's Statement of Assumption - Mesa Dunes Mobile Home Park filed in Form 8-K dated December 23, 1987 which is incorporated herein by reference. 10.11 General partnership Agreement of Partners - Mesa Dunes Mobile Home Park filed in Form 8-K dated December 23, 1987 which is incorporated herein by reference. 10.12 Agreement of Purchase and Sale of Property with Exhibits - Wakonda Shopping Center and Town & Country Shopping Center filed in Form 8-K dated December 30, 1987 which is incorporated herein by reference. 10.13 First Amendment to Agreement of Purchase and Sale of Property with Exhibits - Wakonda Shopping Center and Town & Country Shopping Center filed in Form 8-K dated December 30, 1987 which is incorporated herein by reference. 10.14 Agreement for Consulting Services - Wakonda Shopping Center and Town & Country Shopping Center filed Form 8-K dated December 30, 1987 which is incorporated herein by reference. 10.15 First Trust Deed - Springdale Lake Estates Mobile Home Park filed in form 10Q dated September 30, 1988 as Exhibit 10.2 which is incorporated herein by reference. 10.16 Promissory Note - Southgate Apartments filed in Form 10Q dated September 30, 1990 as Exhibit 10.19 which is incorporated herein by reference. 10.17 Promissory Note - Springdale Lake Mobile Home Park filed in Form 10Q dated September 30, 1990 as Exhibit 10.20 which is incorporated herein by reference. 10.18 Promissory Note - Mesa Dunes, Wakonda, Town & Country Joint Venture filed in Form 10Q dated September 30, 1990 as Exhibit 10.21 which is incorporated herein by reference. 10.19 Stock Purchase Agreement dated November 24, 1992 showing the purchase of 100% of the outstanding stock of Angeles Realty Corporation II by IAP GP Corporation, a subisdiary of MAE GP Corporation, filed in Form 8-K dated December 31, 1992, which is incorporated herein by reference. 10.20 Substitute Trustee's Deed showing the foreclosure on the Oil, Gas and Commerce Buildings by American Life and Insurance Company, filed in Form 8-K dated April 6, 1993 which is incorporated herein by reference. 10.21 Proposed settlement of Fort Worth Option Joint Venture's note receivable with Angeles Mortgage Investment Trust, filed in Form 8-K dated September 6, 1994 which is incorporated herein by reference. 10.22 Agreement for Deed in Lieu of Foreclosure dated October 31, 1995, the partnership, Angeles Realty Corporation II and Angeles Mortgage Investment Trust. 10.23 Bill of Sale and Assignment dated October 31, 1995, by the Partnership in favor of Angeles Mortgage Investment Trust. 10.24 Assignment of Leases dated October 31, 1995, by the Partnership in favor of Angeles Mortgage Investment Trust. 10.25 Limited Warranty Deed dated October 31, 1995, by the Partnership to Angeles Mortgage Investment Trust. 16 Letter from Registrant's former accountant regarding its concurrence with the statements made by the Registrant is incorporated by reference to the Exhibit filed with Form 8-K dated September 1, 1993. 27 Financial Data Schedule. EX-27 2
5 This schedule contains summary financial information extracted from Angeles Income Properties Ltd. V 1996 Year-End 10-KSB and is qualified in its entirety by reference to such 10-KSB filing. 0000792181 ANGELES INCOME PROPERTIES LTD. V 1,000 12-MOS DEC-31-1996 DEC-31-1996 135 0 7 0 0 0 3,243 0 3,443 0 4,812 0 0 0 (3,284) 3,443 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Registrant has an unclassified balance sheet.
-----END PRIVACY-ENHANCED MESSAGE-----