-----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, Hod763DFYu+MTNfrCxlcUcYZTwraTvU5o9v2/iwcGtt2KrFUvaeuQ0fOzlFS0VJE xLvOeXw1TvsIsnzzrSIB5w== 0000914317-96-000156.txt : 19960529 0000914317-96-000156.hdr.sgml : 19960529 ACCESSION NUMBER: 0000914317-96-000156 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960314 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960528 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VALUE PROPERTY TRUST CENTRAL INDEX KEY: 0000079259 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 231862664 STATE OF INCORPORATION: MD FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-06613 FILM NUMBER: 96572964 BUSINESS ADDRESS: STREET 1: 120 ALBANY STREET STREET 2: 8TH FLOOR CITY: NEW BRUNSWICK STATE: NJ ZIP: 08901- BUSINESS PHONE: 9082963080 FORMER COMPANY: FORMER CONFORMED NAME: MORTGAGE & REALTY TRUST DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PNB MORTGAGE & REALTY INVESTORS DATE OF NAME CHANGE: 19850102 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------------- FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): March 14, 1996 -------------- VALUE PROPERTY TRUST ----------------------------------- (Exact name of registrant as specified in its charter) Maryland 1-6613 23-1862664 - ---------------------------- ------------ ------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 120 Albany Street, 8th Floor New Brunswick, New Jersey 08901-2163 - ----------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (908) 296-3080 -------------- TABLE OF CONTENTS Page No. -------- Item 2. Acquisition or Disposition of Assets 2 Item 5. Other Events 2 Item 7. Financial Statements and Exhibits 3 Signatures 4 Appendix A F1-F8 ITEM 2. Acquisition or Disposition of Assets. On March 14, 1996, Value Property Trust ( the "Trust") received net cash proceeds of $44.0 million from the sale of twenty-one commercial mortgage loans to an unaffiliated third party. The price received for the mortgage loans was determined through a bid process. Victor Capital Group was retained by the Trust to act as financial advisor for this transaction. The carrying value of the loans was $41.7 million. In the period January 1, 1996 to March 1, 1996, Value Property Trust received aggregate net cash proceeds of $11.0 million attributable to the repayment of four commercial loans. These four loans had a carrying value of $8.8 million. The Trust's remaining mortgage loan holdings are currently less than $1.0 million. While the Trust's Amended and Restated Indenture dated as of September 29, 1995 (the "Indenture") relating to the Trust's outstanding 11.125 percent Senior Secured Notes due 2002 (the "Senior Secured Notes") requires the Trust to use the proceeds from asset sales to make a purchase offer to redeem Senior Secured Notes, the Trust has determined to redeem 100 percent of its outstanding Senior Secured Notes. See Item 5 below. In connection with its emergence from Chapter 11 proceedings in September 1995, the Trust implemented Fresh Start Reporting as provided in Statement of Position 90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code." As a result, gains and losses arising from asset sales from the held-for-sale category over the twelve months following emergence from bankruptcy will not be immediately recognized but will adjust the basis of the remaining assets held for investment. Item 5. Other Events On March 28, 1996, Value Property Trust entered into a financing agreement with BlackRock Capital Finance L.P. The agreement provides for the issuance of $67.4 million aggregate principal amount of new Floating Rate Senior Secured Notes to BlackRock Capital. The new Floating Rate Notes will bear interest at 30 day LIBOR plus 1.375 percent, payable monthly, and will have a stated maturity date of April 1, 1999. The new Notes are redeemable in whole or in part prior to maturity without a penalty. The financing is anticipated to be completed within 45 days. In conjunction with the financing and in accordance with the terms of the Trust's Indenture, the Trust has notified the Indenture Trustee that it is exercising the optional redemption provision in the Indenture. The Trust will utilize approximately $60.7 million of available cash; which includes $55.0 million of cash proceeds from the transactions discussed in Item 2 above, and $67.4 million of proceeds from the BlackRock financing to redeem all of the $110.0 million Senior Secured Notes presently outstanding, pay approximately $4.1 million of accrued interest, and to prepay an existing $14.0 million mortgage loan. - 2 - Item 7. Financial Statements and Exhibits (b) Pro Forma Financial Information The Pro Forma Balance Sheet as of December 31, 1995, and the Pro Forma Statement of Operations for the Three Months Ended December 31, 1995 and the Year Ended September 30, 1995, which are attached as Appendix A, hereto, have been prepared to reflect the sale and repayment of the mortgage loan portfolio, the new financing agreement with BlackRock Capital and the adjustments described in the accompanying notes. Additionally, the Pro Forma Statement of Operations for the Year Ended September 30, 1995 is presented as if the Prepackaged Plan of Reorganization and Fresh Start Reporting which was implemented on September 30, 1995, had occurred as of October 1, 1994. The pro-forma financial information is based on and should be read in conjunction with the historical financial statements and the notes thereto filed as part of the Trust's quarterly report on Form 10-Q for the quarter ended December 31, 1995 and the Trust's annual report on Form 10-K for the fiscal year ended September 30 , 1995. The Pro Forma Balance Sheet was prepared as if the mortgage loan sale, mortgage loan repayments and new financing had occurred on December 31, 1995. The Pro Forma Statements of Operations were prepared as if the mortgage loan sale, mortgage loan repayments, new financing, the Prepackaged Plan of Reorganization and Fresh Start Reporting had occurred on October 1, 1994. The pro forma financial information is unaudited and not necessarily indicative of the results that would have actually occurred had the mortgage loan sale, repayments and new financing been consummated at the beginning of fiscal 1995 or 1994 nor does it purport to represent the financial position and results of operations for future periods. - 3 - Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. VALUE PROPERTY TRUST By: /s/ Robert T. English ------------------------- Robert T. English Chief Financial Officer (Principal Financial Officer) DATE: May 28, 1996 ---------------- - 4 - APPENDIX A TO CURRENT REPORT ON FORM 8-K ITEMS 2, 5 AND 7 UNAUDITED PROFORMA FINANCIAL STATEMENTS AS OF DECEMBER 31, 1995 AND SEPTEMBER 30, 1995 VALUE PROPERTY TRUST Form 8-K -- Item 2, 5 and 7 (b) VALUE PROPERTY TRUST INDEX OF UNAUDITED PRO FORMA FINANCIAL STATEMENTS Page No. -------- Pro Forma Balance Sheet as of December 31, 1995........................ F-2 Pro Forma Statement of Operations for the Three Months Ended December 31, 1995 .................................. F-4 Pro Forma Statement of Operations for the Year Ended September 30, 1995 ........................................ F-5 Notes and Managements's Assumptions to Unaudited Pro Forma Financial Statements................................... F-7
VALUE PROPERTY TRUST Pro Forma Balance Sheet As of December 31, 1995 (Unaudited) - ------------------------------------------------------------------------------------------------------------------------------------ Pro Forma Historical Mortgage Pro Forma December 31, Sale and New Amount (in thousands) 1995 Repayment Financing (As Adjusted) ---------------------------------------------------------------------- ASSETS Assets Held for Sale: Mortgage loans........................................ $ 47,303 $(47,303) A $ $ -- Investments in partnerships .......................... 5,231 5,231 Real estate owned..................................... 42,667 42,667 Notes Receivable...................................... 333 (333) A -- -------- -------- ------- -------- 95,534 (47,636) -- 47,898 -------- -------- ------- -------- Assets Held for Investment: Mortgage loans........................................ 3,023 (2,131) A 892 Investments in partnerships .......................... 20,565 20,565 Real estate owned..................................... 86,606 (4,949) A 81,657 -------- -------- ------- -------- 110,194 (7,080) -- 103,114 -------- -------- ------- -------- Total Invested Assets...................................... 205,728 (54,716) 151,012 Cash and cash equivalents ................................. 17,782 (3,916) B 13,866 Restricted cash............................................ 2,362 2,362 Interest receivable and other assets....................... 6,654 (995) A 2,400 B 8,059 -------- -------- ------- -------- $232,526 $(55,711) $(1,516) $175,299 ======== ======== ======= ======== (Continued) - F-2 - VALUE PROPERTY TRUST Pro Forma Balance Sheet As of December 31, 1995 (Unaudited) (Continued) - ------------------------------------------------------------------------------------------------------------------------------------ Pro Forma Historical Mortgage Pro Forma December 31, Sale and New Amount (in thousands) 1995 Repayment Financing (As Adjusted) ---------------------------------------------------------------------- LIABILITIES Senior secured notes (due 2002)............................ $109,975 $(55,033) A $(54,942) B $ -- Mortgage payable .......................................... 13,953 (13,953) B -- New floating rate notes.................................... -- 67,379 B 67,379 Accounts payable and accrued expenses ..................... 3,960 (678) A 3,282 Interest payable .......................................... 3,127 3,127 -------- -------- ------- -------- 131,015 (55,711) (1,516) 73,788 -------- -------- ------- -------- SHAREHOLDERS' EQUITY Preferred shares, $1 par value: 3,500,000 shares authorized, none issued.............. -- -- Common shares, $1 par value: 20,000,000 shares authorized, 11,226,310 and 11,226,215 shares issued and outstanding ............................... 11,226 11,226 Additional paid-in capital ................................ 88,848 88,848 Retained earnings ......................................... 1,437 1,437 -------- -------- ------- -------- Total shareholders' equity............................ 101,511 -- -- 101,511 -------- -------- ------- -------- Total liabilities and shareholders' equity............ $232,526 $(55,711) $ (1,516) $175,299 ======== ======== ======== ========
See accompanying notes. - F-3 -
VALUE PROPERTY TRUST Pro Forma Statement of Operations For the Three Months Ended December 31, 1995 (Unaudited) - --------------------------------------------------------------------------------------------------------------------------- Three Months Pro Forma Adjustments Ended Mortgage Sale, Pro Forma December 31, Repayments and Amount (in thousands) 1995 New Financing (As Adjusted) ------------------------------------------------------------- Income: Income on rental properties: Rental income..................................... $ 6,650 $ $ 6,650 Operating expense reimbursements.................. 754 754 Interest and fee income on mortgage loans ........ 1,679 (1,551) C 128 Interest on short-term investments................ 304 (179) D 125 Other............................................. 8 8 ------- ------- ------- 9,395 (1,730) 7,665 Expenses: Interest.............................................. 3,565 (2,185) E 1,380 Expenses of rental properties: Depreciation and amortization .................... 564 564 Operating ........................................ 3,076 3,076 Administrative ....................................... 753 753 ------- ------- ------- 7,958 (2,185) 5,773 ------- ------- ------- Net income................................................. $ 1,437 $ 455 $ 1,892 ======= ======= ======= Per share: Net income................................................. $ .13 $ .04 $ .17 ======= ======= ======= Weighted average number of common shares outstanding.................................... 11,226 11,226 11,226 ======= ======= =======
See accompanying notes. - F-4 -
VALUE PROPERTY TRUST Pro Forma Statement of Operations For the Year Ended September 30, 1995 (Unaudited) - ------------------------------------------------------------------------------------------------------------------------------------ The Year Pro Forma Adjustments Ended Reorganization Mortgage Sale, Pro Forma September 30, and Fresh Start Repayment and Amount (in thousands) 1995 Reporting New Financing (As Adjusted) ------------------------------------------------------------------- Income: Income on rental properties: Rental income..................................... $ 24,608 $ $ $ 24,608 Operating expense reimbursements.................. 2,286 2,286 Interest and fee income on mortgage loans 9,353 (8,778) L 575 Interest on short-term investments................ 3,086 (2,586) F 500 Other............................................. 131 131 -------- -------- -------- -------- 39,464 (2,586) (8,778) 28,100 Expenses: Interest.............................................. 35,900 (21,780) G (8,602) M 5,518 Expenses of rental properties: Depreciation and amortization .................... 7,306 (2,390) I 4,916 Operating ........................................ 11,702 11,702 Administrative ....................................... 4,518 4,518 Provision for losses on mortgage loans and related investments .............................. 3,000 (3,000) H -- -------- -------- -------- -------- 62,426 (27,170) (8,602) 26,654 -------- -------- -------- -------- Income (loss) from operations before reorganization items, and extraordinary item........................ (22,962) 24,584 (176) 1,446 Reorganization items: Professional fees and other........................... 6,219 (6,219) J -- Interest income....................................... (441) 441 J -- Write down of invested assets to reorganization value............................. 66,597 (66,597) J -- -------- -------- -------- -------- 72,375 (72,375) -- -- -------- -------- -------- -------- (Continued) - F-5 - VALUE PROPERTY TRUST Pro Forma Statement of Operations For the Year Ended September 30, 1995 (Unaudited) (Continued) - ------------------------------------------------------------------------------------------------------------------------------------ The Year Pro Forma Adjustments Ended Reorganization Mortgage Sale, Pro Forma September 30, and Fresh Start Repayment and Amount (in thousands) 1995 Reporting New Financing (As Adjusted) ------------------------------------------------------------------- Net income (loss) before extraordinary item................ (95,337) 96,959 (176) 1,446 -------- -------- -------- -------- Extraordinary item-Gain on extinguishment of debt............................................... 75,304 (75,304) K -- -------- -------- -------- -------- Net income (loss).......................................... $(20,033) $ 21,655 $ (176) $ 1,446 ======== ======== ======== ======== Per share: Net income (loss).......................................... $ * $ 0.13 ======== ======== Weighted average number of common shares outstanding 11,226 11,226 ======== ========
* Per share amounts are not meaningful due to Fresh Start reporting. See accompanying notes. - F-6 - VALUE PROPERTY TRUST Notes and Management's Assumptions to Unaudited Pro Forma Financial Statements December 31, 1995 and September 30, 1995 NOTE 1 - BASIS OF PRESENTATION The accompanying Pro Forma Balance Sheet as of December 31, 1995 is presented as if the mortgage loan sale, mortgage loan repayments and new financing had occurred on December 31, 1995. The accompanying Pro Forma Statements of Operations is presented as if the mortgage loan sale, mortgage loans repayments, new financing, Prepackaged Plan of Reorganization and Fresh Start Reporting had occurred on October 1, 1994. These pro forma financial statements should be read in conjunction with the historical financial statements and notes hereto as of December 31, 1995 and September 30, 1995 filed as part of the Trust's quarterly report on Form 10-Q for the quarter ended December 31, 1995 and the Trust's annual report on Form 10-K for the fiscal year ended September 30, 1995, respectively. In management's opinion, all adjustments necessary to reflect the effects of the aforementioned transactions have been made. The unaudited pro forma financial statements are not necessarily indicative of the actual financial position as of December 31, 1995 or what the actual results of operations would have been assuming the mortgage loan sale, repayments and new financing had been consummated on October 1, 1994, nor do they represent the financial position and results of operations for future periods. NOTE 2 - ADJUSTMENTS TO THE PRO FORMA FINANCIAL STATEMENTS A) Reflects net cash proceeds of $55.0 million received from the sale and repayment of 25 commercial mortgage loans, adjusts the carrying value of Real Estate - Held For Investment by $4.9 million as a purchase accounting adjustment in accordance with Fresh Start Reporting and reflects the use of the cash proceeds to retire existing debt in the amount of $55.0 million. B) Reflects the new financing with BlackRock Capital in the amount of $67.4 million, deferred financing costs of $2.4 million and the repayment of the outstanding 11.125% Senior Secured Notes and Mortgage Payable in the amount of $54.9 million and $13.9 million, respectfully. C) Reflects the reversal of interest income related to the mortgage loans which were sold or repaid early. - F-7 - D) Reflects the adjustment of investment income to reflect an average cash position of approximately $10.0 million at an average investment rate of 5.0% for the three months ended December 31, 1995. E) Reflects the reversal of interest expense of $3.6 million related to the 11.125% Senior Secured Notes and Mortgage Payable which were repaid and the addition of interest expense of $1.4 million related to the New Floating Rate Notes at an average interest rate, which includes amortization of $0.2 million of deferred financing costs, of 8.20% for the three months ended December 31, 1995. F) Reflects the adjustment of investment income to reflect an average cash position of approximately $10.0 million at an average investment rate of 5.0% for fiscal 1995. G) Reflects the reversal of interest expense related to the previously Outstanding Notes ($34.0 million) which were cancelled as a result of the Reorganization and the addition of interest expense for the 11.125% Senior Secured Notes ($12.2 million). H) Reflects the reversal of the $3.0 million provision for losses which would be eliminated as a result of the adjustment of invested assets to reorganization value. I) Reflects the adjustment to depreciation and amortization resulting from reduced basis in owned real estate as a result of the adjustment of invested assets to reorganization value. J) Reflects the reversal of reorganization expenses based upon the assumption that the Restructuring was completed and no expenses related to the Restructuring were incurred. K) Reflects the reversal of the gain on extinguishment of debt based upon the assumption that the Restructuring was complete on October 1, 1994. L) Reflects the reversal of interest income related to the mortgage loans that were sold or repaid early. M) Reflects the reversal of interest expense of $14.1 million related to the 11.125% Senior Secured Notes and Mortgage Payable which were repaid and the addition of interest expense of $5.5 million related to the New Floating Rate Notes at an average interest rate, which includes amortization of $0.8 million of deferred financing costs, of 8.20% for fiscal 1995. - F-8 - -----END PRIVACY-ENHANCED MESSAGE-----