-----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, FZFmUr2zCmC4UrwRZdIpRa9XbV+cp9KZQSMVe5THL3o7dIOHXoZ83ODBrWpJOoOO dpcv3MFz+JCKTemasi2yww== 0000804752-97-000001.txt : 19970815 0000804752-97-000001.hdr.sgml : 19970815 ACCESSION NUMBER: 0000804752-97-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORUM RETIREMENT PARTNERS L P CENTRAL INDEX KEY: 0000804752 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SOCIAL SERVICES [8300] IRS NUMBER: 351686799 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09302 FILM NUMBER: 97661783 BUSINESS ADDRESS: STREET 1: 8900 KEYSTONE CROSSING STE 200 STREET 2: PO BOX 40498 CITY: INDIANAPOLIS STATE: IN ZIP: 46240-0498 BUSINESS PHONE: 3178460700 MAIL ADDRESS: STREET 1: 8900 KEYSTONE CROSSING STE 200 STREET 2: PO BOX 40498 CITY: INDIANAPOLIS STATE: IN ZIP: 46240-0498 10-Q 1 FORUM RETIREMENT PARTNERS, LP SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 For Quarter Ended June 30, 1997 Commission File Number: 1-9302 FORUM RETIREMENT PARTNERS, L.P. (Exact name of registrant as specified in its charter) Organized in Delaware I.R.S. No.35-1686799 10400 Fernwood Road Bethesda, MD 20817 Telephone: (301) 380-9000 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name Of Each Exchange On Which Registered Preferred Depository Units American Stock Exchange Representing Preferred Limited Partners' Interests Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 INDEX FORUM RETIREMENT PARTNERS, L.P. AND SUBSIDIARY PARTNERSHIP
PART I. FINANCIAL INFORMATION PAGE - ----------------------------- ---- Item 1. Financial Statements (Unaudited) Condensed Consolidated Balance Sheets -- June 30, 1997 and December 31, 1996 3 Condensed Consolidated Statements of Operations -- Three and six months ended June 30, 1997 and 1996 4 Condensed Consolidated Statement of Partners' Equity -- June 30, 1997 and December 31, 1996 5 Condensed Consolidated Statements of Cash Flows -- Six months ended June 30, 1997 and 1996 6 Notes to Condensed Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II. OTHER INFORMATION - -------------------------- Item 1. Legal Proceedings 12 Item 2. Changes in Securities 12 Item 3. Defaults Upon Senior Securities 12 Item 4. Submission of Matters to a Vote of Security Holders 12 Item 5. Other Information 12 Item 6. Exhibits and Reports on Form 8-K 13
PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS FORUM RETIREMENT PARTNERS, L.P. AND SUBSIDIARY PARTNERSHIP CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
June 30, December 31, 1997 1996 ------------ ------------ (Unaudited) ASSETS ------ Cash and cash equivalents $ 4,252 $ 6,199 Restricted Cash 3,355 2,663 Other assets 7,199 4,628 Property and equipment, net 98,064 97,540 Deferred financing costs, net 1,344 1,528 ----------- ----------- TOTAL ASSETS $ 114,214 $ 112,558 =========== ============ LIABILITIES AND PARTNERS' EQUITY -------------------------------- Debt $ 47,434 $ 47,984 Other liabilities 9,392 8,950 Deferred management fees due to parent of general partner 15,780 15,780 ---------- ---------- TOTAL LIABILITIES 72,606 72,714 ---------- ---------- General partner's equity in subsidiary partnership 254 236 Partners' equity: General partner 519 502 Limited partners (15,285 units issued and outstanding) 40,835 39,106 ---------- ---------- TOTAL PARTNERS' EQUITY 41,354 39,608 ---------- ---------- TOTAL LIABILITIES AND PARTNERS' EQUITY $ 114,214 $ 112,558 ========== ==========
See Notes to Condensed Consolidated Financial Statements. FORUM RETIREMENT PARTNERS, L.P. AND SUBSIDIARY PARTNERSHIP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Six Months Ended Ended June 30, June 30, -------------------- ------------------- 1997 1996 1997 1996 ------- -------- -------- ------- (in thousands except per unit amounts) Revenues: Routine revenue $ 12,671 $ 11,692 $25,067 $23,122 Ancillary revenue 2,397 1,475 4,271 3,164 Other income 99 29 140 80 ---------- -------- ------- ------- TOTAL REVENUES 15,167 13,196 29,478 26,366 ---------- -------- ------- ------- Costs and expenses: Routine expenses 8,746 8,162 17,495 16,030 Ancillary costs 1,682 1,238 3,220 2,528 Management fees to MSLS 1,209 1,051 2,347 2,092 General and administrative 45 233 146 454 Litigation 122 2 159 116 Depreciation 833 950 1,777 1,898 Interest 1,298 1,301 2,570 2,612 ---------- -------- ------- ------- TOTAL COSTS AND EXPENSES 13,935 12,937 27,714 25,730 ---------- -------- ------- ------- Income before general partner's interest in income of subsidiary partnership 1,232 259 1,764 636 General partner's interest in income of subsidiary partnership 13 3 18 6 ---------- -------- ------- ------- NET INCOME $ 1,219 $ 256 $ 1,746 $ 630 ========== ======== ======= ======= General partner's interest in net income $ 12 $ 2 $ 17 $ 6 ========== ======== ======= ======= Limited partners' interest in net income $ 1,207 $ 254 $ 1,729 $ 624 ========== ======== ======= ======= Average number of units outstanding 15,285 15,285 15,285 15,285 ========== ======== ======= ======= Net income per limited partner unit $ 0.08 $ 0.02 $ 0.11 $ 0.04 ========== ======== ======= =======
See Notes to Condensed Consolidated Financial Statements. FORUM RETIREMENT PARTNERS, L.P. AND SUBSIDIARY PARTNERSHIP CONDENSED CONSOLIDATED STATEMENT OF PARTNERS' EQUITY (Unaudited)
General Limited Partner Partners --------- --------- (in thousands) Balances at January 1, 1997 $ 502 $ 39,106 Net Income 17 1,729 --------- --------- Balances at June 30, 1997 $ 519 $ 40,835 ========= ========= Accumulated balances: Capital contributions $ 1,173 $ 116,279 Offering costs (4) (6,715) Cash distributions (255) (29,679) Accumulated losses (395) (39,050) --------- --------- Balances at June 30, 1997 $ 519 $ 40,835 ========= =========
See Notes to Condensed Consolidated Financial Statements. FORUM RETIREMENT PARTNERS, L.P. AND SUBSIDIARY PARTNERSHIP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended June 30, ---------------------------------- 1997 1996 ----------- --------- (in thousands) CASH PROVIDED BY OPERATING ACTIVITIES $ 1,664 $ 3,412 ----------- --------- CASH USED IN INVESTING ACTIVITIES Additions to property and equipment (2,301) (2,086) ----------- --------- Cash flows from financing activities: Reduction of long-term debt (550) (499) Payments on subordinated debentures (68) (17) Net (increase) decrease in restricted cash (692) 24 ----------- --------- CASH USED IN FINANCING ACTIVITIES (1,310) (492) ----------- --------- Increase (decrease) in cash and cash equivalents (1,947) 834 Cash and cash equivalents at beginning of period 6,199 2,960 ----------- --------- Cash and cash equivalents at end of period $ 4,252 $ 3,794 =========== =========
See Notes to Condensed Consolidated Financial Statements. FORUM RETIREMENT PARTNERS, L.P. AND SUBSIDIARY PARTNERSHIP NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation - ------------------------- The accompanying condensed consolidated financial statements of Forum Retirement Partners, L.P. (the "Partnership") and subsidiary partnership have been prepared by the Partnership without audit. Certain information and footnote disclosures normally included in financial statements presented in accordance with generally accepted accounting principles have been condensed or omitted. The Partnership believes the disclosures made are adequate to make the information presented not misleading. However, the condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Partnership's Annual Report on Form 10-K for the fiscal year ended December 31, 1996. In the opinion of the Partnership, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly the financial position of the Partnership as of June 30, 1997 and December 31, 1996, and the results of operations and cash flows for the three and six months ended June 30, 1997. Interim results are not necessarily indicative of fiscal year performance because of the impact of seasonal and short-term variations. 2. Ownership Interest of the General Partner and its Affiliates - ---------------------------------------------------------------- Forum Retirement, Inc., a wholly-owned subsidiary of Forum Group, Inc. ("Forum Group"), is the general partner of the Partnership (the "General Partner") and owns a one percent interest in the Partnership and a one percent partnership interest in a subsidiary operating partnership in which the Partnership owns a ninety-nine percent limited partnership interest. The General Partner's interest in the subsidiary operating partnership is reflected in the statements of operations as a reduction of the income or loss of the Partnership. Forum Group beneficially owns approximately 79% of the outstanding Preferred Depository Units (the "Units") representing preferred limited partner interests in the Partnership. On June 21, 1997, HMC Senior Communities, Inc. ("HMCSC"), a wholly-owned subsidiary of Host Marriott Corporation ("Host Marriott"), acquired all of the outstanding stock of Forum Group from Marriott Senior Living Services, Inc. ("MSLS"), a subsidiary of Marriott International, Inc. ("MI"). In connection with the acquisition, Forum Group assigned to MSLS its interest as manager under a long-term management agreement (the "Management Agreement") for the nine senior living communities owned by the Partnership. 3. Commitments and Contingencies - --------------------------------- On January 24, 1994, The Russell F. Knapp Revocable Trust (the "Plaintiff") filed a complaint (the "Iowa Complaint") in the United States District Court for the Northern District of Iowa (the "Iowa Court") against the General Partner alleging breach of the partnership agreement of the Partnership ("Partnership Agreement"), breach of fiduciary duty, fraud, insider trading, and civil conspiracy/aiding and abetting. The Plaintiff subsequently amended the Iowa Complaint, adding Forum Group as a defendant. The Iowa Complaint is a derivative action seeking recovery of damages and other relief on behalf of, and not from, the Partnership. The Iowa Complaint alleged, among other things, that the Plaintiff holds a substantial number of Units, that the Board of Directors of the General Partner is not comprised of a majority of independent directors as required by the Partnership Agreement and as allegedly represented in the Partnership's 1986 Prospectus for its initial public offering, and that the General Partner's Board of Directors has approved and/or acquiesced to an 8% management fee charged by Forum Group under the Management Agreement. The Iowa Complaint further alleged that the "industry standard" for such fees is 4%, thereby resulting in an "overcharge" to the Partnership estimated by the Plaintiff at $1.8 million per annum beginning in 1994. The Plaintiff sought the restoration of certain former directors to the Board of Directors of the General Partner and the removal of certain other directors from the Board, an injunction prohibiting the payment of an 8% management fee, and unspecified compensatory and punitive damages. On April 3, 1995, the Iowa Court entered an order dismissing the Iowa Complaint on jurisdictional grounds. Although the Plaintiff filed a notice of appeal of the Iowa Court's ruling, it subsequently dismissed this appeal. FORUM RETIREMENT PARTNERS, L.P. AND SUBSIDIARY PARTNERSHIP NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) On June 15, 1995, the Plaintiff filed a complaint (the "Indiana Complaint") in the United States District Court for the Southern District of Indiana (the "Indiana Court") against the General Partner and Forum Group seeking essentially the same relief. The defendants moved to dismiss the Indiana Complaint for failure to state a claim for which relief could be granted and, in response, on December 11, 1995 the Plaintiff amended the Indiana Complaint. The defendants moved to dismiss the amended complaint on similar grounds, and on May 17, 1996, the Indiana Court ruled on the defendant's motion by dismissing without prejudice two of the four counts contained in the amended complaint, namely the counts for alleged insider trading and civil conspiracy/aiding and abetting. The litigation is in the pretrial phase, and both the Plaintiff and the defendants are awaiting the Indiana Court's ruling on their respective motions for summary judgment. The Indiana Court has set a trial date for December 8, 1997. The General Partner intends to vigorously defend against this litigation. FORUM RETIREMENT PARTNERS, L.P. AND SUBSIDIARY PARTNERSHIP NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORUM RETIREMENT PARTNERS, L.P. AND SUBSIDIARY PARTNERSHIP Forward-Looking Statements - -------------------------- Certain matters discussed in the Form 10-Q are forward-looking statements within the meaning of the Private Litigation Reform Act of 1995 and as such may involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Partnership to be different from any future results, performance or achievements expressed or implied by such forward-looking statements. Although the Partnership believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectation will be attained. These risks are detailed from time to time in the Partnership's filings with the Securities and Exchange Commission. The Partnership undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. Results of Operations - --------------------- THREE MONTHS ENDED JUNE 30, 1997 AND 1996. As of June 30, 1997 and 1996, the Partnership owned nine senior living communities, all of which are currently managed by MSLS. The Partnership reported net income of $1,219,000 for the three months ended June 30, 1997 compared to net income of $256,000 for the same period in 1996. Total revenues for the three months ended June 30, 1997 increased by $1,971,000 or 14.9%, to $15,167,000 compared to the same period in 1996. Total revenues consist primarily of routine service and ancillary service revenues. Routine service revenues are generated from monthly charges for independent living units and daily charges for assisted living suites and nursing beds which are recognized monthly based on the terms of the residents' agreements. Ancillary service revenues are generated on a "fee for service" basis for supplementary items requested by residents and are recognized as the services are provided. The revenue increase is primarily the result of increases in residency fees and charges in the independent living, assisted living and nursing components, the favorable impact of recently opened expansion units and increases in therapy and other ancillary healthcare services. Combined average occupancy (calculated based on the number of units occupied during the respective period) at the nine senior living communities was 94.1% for the three months ended June 30, 1997, a slight decrease from the prior year. The combined average monthly rental rate per occupied unit (calculated using revenue generated from the respective rental components and excluding non-rental revenues) increased 6% for the three month period ended June 30, 1997 compared to the same period in 1996, with each of the nine communities experiencing increases. Routine expenses and ancillary costs for the three month period ended June 30, 1997 increased $1,028,000, or 10.9%, to $10,428,000 compared to the same period in 1996. The increased costs and expenses resulted from a higher level of nursing and therapy staffing as well as an increase in the amount of therapy and ancillary healthcare services, resulting from the expansions described above. These recently opened expansion units at four communities impacted the costs associated with the higher level of housekeeping and dining services. The foregoing resulted in an increase in Net Operating Income ("NOI") of $715,000, or 26.3%, to $3,431,000. NOI is calculated as routine and ancillary revenues ("operating revenues") less routine and ancillary expenses ("operating expenses") and management fees. Operating margin (operating revenues less operating expenses) as a percentage of operating revenues increased from 28.6% for the three month period ended June 30, 1996 to 30.8% for the comparable period in 1997. Management fees increased as a function of revenue. Total interest expense for the three months ended June 30, 1997 decreased by $3,000 compared to total interest expense for the same period in 1996 due primarily to scheduled principal amortization of long-term debt. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) FORUM RETIREMENT PARTNERS, L.P. AND SUBSIDIARY PARTNERSHIP SIX MONTHS ENDED JUNE 30, 1997 AND 1996. The Partnership reported net income of $1,746,000 for the six months ended June 30, 1997 compared to net income of $630,000 for the same period in 1996. Total revenues for the six months ended June 30, 1997 increased by $3,112,000, or 11.8%, to $29,478,000 compared to the same period last year. Combined average occupancy (calculated based on the number of units occupied during the respective period) at the nine communities was 93.7% for the six months ended June 30, 1997, a decrease of approximately one half percentage point compared to the same period in 1996. The combined average monthly rental rate per occupied unit (calculated using revenue generated from the respective rental components and excluding non-rental revenues) increased 6% for the six months ended June 30, 1997 compared to the same period in 1996, with each of the nine communities experiencing increases. The revenue increase was favorably impacted by recently opened expansion units and increases in therapy and other ancillary services. Routine expenses and ancillary costs for the six months ended June 30, 1997 increased $2,157,000, or 11.6%, to $20,715,000 compared to the same period in 1996. The increased costs and expenses resulted primarily from a generally higher level of nursing and therapy healthcare staffing, the increased provision of therapy and other ancillary healthcare services and other unremarkable operational trends. NOI increased $640,000, or 11.4%, to $6,276,000 and operating margin remained unchanged at 29.4%. Management fees increased as a function of revenue. Total interest expense for the six months ended June 30, 1997 decreased by $42,000 compared to total interest expense for the same period in 1996 due primarily to a scheduled principal amortization of long-term debt. INCOME TAXES. The Omnibus Budget Reconciliation Act of 1987 provides that certain publicly traded partnerships will be treated as corporations for federal income tax purposes. A grandfather provision delays corporate tax status until 1998 for publicly traded partnerships in existence prior to December 18, 1987. On August 8, 1988 the General Partner was authorized by the limited partners to do all things deemed necessary or desirable to insure that the Partnership is not treated as a corporation for federal income tax purposes. Alternatives available to avoid corporate taxation after 1998 include: (i) selling or otherwise disposing of all or substantially all of the Partnership's assets pursuant to a plan of liquidation and (ii) converting the Partnership into a real estate investment trust or other type of legal entity. Such actions are prohibited or restricted under the Partnership's current financing and may require the granting of a waiver by the lender thereunder. There can be no assurance that any such waiver would be granted. There can be no assurance that the Partnership will avoid being taxed as a corporation for federal income tax purposes. On August 5, 1997, President Clinton signed the Taxpayer Relief Act of 1997 (the "Act"). A provision in the Act allows certain publicly traded partnerships which would become subject to tax as a corporation beginning in 1998 to elect to be subject to a special tax on gross income from its active conduct of a trade or business, and continue to avoid being treated as a corporation for federal income tax purposes. The tax generally applies to a partnership's gross income at the rate of three and one half percent, effective for taxable years beginning after December 31, 1997. The General Partner intends to evaluate the impact making the election allowed by the Act would have on the Partnership. Financial condition - ------------------- LIQUIDITY AND CAPITAL RESOURCES. At June 30, 1997, the Partnership had cash and cash equivalents of $4,252,000 and restricted cash of $3,355,000. Cash provided by operating activities was $1,664,000 for the six months ended June 30, 1997, $1,748,000 less than the prior year due principally to an increase in accounts receivable and a decrease in accounts payable and accrued expenses. The Partnership believes that it has adequate liquidity to meet its foreseeable working capital requirements. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) FORUM RETIREMENT PARTNERS, L.P. AND SUBSIDIARY PARTNERSHIP The Partnership has ongoing expansion programs relating to certain of its communities in an effort to further improve the Partnership's results of operations. Currently, four expansion projects have been completed, two expansion projects are under construction and another three expansion projects are in active development or design. Two of the three projects currently in development or design are expected to begin construction by the end of 1997. The four completed projects increased the number of living and nursing units owned by the Partnership by approximately 4% at a capital cost of $6.4 million. The five projects which are either under construction or are in active development or design are expected to increase the number of living and nursing units owned by the Partnership by approximately 16% at an estimated capital cost of $21.9 million. The expansions are designed to modify the uses of or add capacity to existing facilities without incurring substantial land acquisition and common area build-out costs. Certain expansions will require additional regulatory approvals. The Partnership expended $2,301,000 and $2,086,000 for the six months ended June 30, 1997 and 1996, respectively, related to these expansion projects, and renewal and replacement projects for existing properties. The Partnership is financing and intends to continue to finance this expansion program from the Partnership's cash flow from operations. If cash flow from operations is insufficient to complete future expansion on a timely basis, the expansion may be delayed, reduced in scope or discontinued. The terms of the Partnership's current long-term debt agreement restrict the Partnership from incurring additional third-party financing (other than $1 million of equipment financing) and prohibit the imposition of liens on the Partnership's assets. There can be no assurance that a waiver can be obtained from the lender to permit any third-party financing, or whether, when and on what terms any such financing may be available. As a result of the capital required to fund the expansion program, the Partnership does not expect to make distributions in respect of limited partner units in the foreseeable future. The implementation of the expansion program and its impact on the value of an investment in the Partnership is subject to a number of variables, including without limitation, the availability of cash flow from operations, the ability to obtain required zoning variances and permits from local governmental authorities and the timing thereof, whether development and construction costs are higher or lower than anticipated, whether construction is completed faster or slower than anticipated, whether newly added living units are occupied faster or slower than anticipated and whether operating costs are higher or lower than anticipated. Cash used in financing activities was $1,310,000 for the six months ended June 30, 1997, an increase of $818,000 over the prior year principally due to an increase in restricted cash. PART II. Other Information FORUM RETIREMENT PARTNERS, L.P. AND SUBSIDIARY PARTNERSHIP Item 1. Legal Proceedings - -------------------------- On January 24, 1994, The Russell F. Knapp Revocable Trust (the "Plaintiff") filed a complaint (the "Iowa Complaint") in the United States District Court for the Northern District of Iowa (the "Iowa Court") against the General Partner alleging breach of the Partnership Agreement, breach of fiduciary duty, fraud, insider trading, and civil conspiracy/aiding and abetting. The Plaintiff subsequently amended the Iowa Complaint, adding Forum Group as a defendant. The Iowa Compliant is a derivative action seeking damages and other relief on behalf of, and not from, the Partnership. The Iowa Complaint alleged, among other things, that the Plaintiff holds a substantial number of Units, that the Board of Directors of the General Partner is not comprised of a majority of independent directors as required by the Partnership Agreement and as allegedly represented in the Partnership's 1986 Prospectus for its initial public offering, and that the General Partner's Board of Directors has approved and/or acquiesced to an 8% management fee charged by Forum Group under the Management Agreement. The Iowa Complaint further alleged that the "industry standard" for such fees is 4%, thereby resulting in an "overcharge" to the Partnership estimated by the Plaintiff at $1.8 million per annum beginning in 1994. The Plaintiff sought the restoration of certain former directors to the Board of Directors of the General Partner and the removal of certain other Directors from the Board, an injunction prohibiting the payment of an 8% management fee, and unspecified compensatory and punitive damages. On April 3, 1995, the Iowa Court entered an order dismissing the Iowa Complaint on jurisdictional grounds. Although the Plaintiff filed a notice of appeal of the Iowa Court's ruling, it subsequently dismissed this appeal. On June 15, 1995, the Plaintiff filed a complaint (the "Indiana Complaint") in the United States District Court for the Southern District of Indiana (the "Indiana Court") against the General Partner and Forum Group seeking essentially the same relief. The defendants moved to dismiss the Indiana Complaint for failure to state a claim for which relief could be granted and, in response, on December 11, 1995 the Plaintiff amended the Indiana Complaint. The defendants moved to dismiss the amended complaint on similar grounds, and on May 17, 1996, the Indiana Court ruled on the defendant's motion by dismissing without prejudice two of the four counts contained in the amended complaint, namely the counts for alleged insider trading and civil conspiracy/aiding and abetting. The litigation is in pretrial phase, and both the Plaintiff and the defendant are awaiting the Indiana Court's ruling on their respective motions for summary judgment. The Indiana Court has set a trial date for December 8, 1997. The General Partner intends to vigorously defend against this litigation. Item 2. Changes in Securities - ------------------------------ None. Item 3. Defaults Upon Senior Securities - ---------------------------------------- None. Item 4. Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------ None. Item 5. Other Information - -------------------------- None. PART II. Other Information (continued) FORUM RETIREMENT PARTNERS, L.P. AND SUBSIDIARY PARTNERSHIP Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- (a) Exhibits None. (b) Reports on Form 8-K. July 7, 1997 - Report of the announcement that HMC Senior Communities, Inc., a wholly-owned subsidiary of Host Marriott Corporation, acquired all of the outstanding stock of Forum Group, Inc. ("Forum Group") from Marriott Senior Living Services, Inc., a subsidiary of Marriott International, Inc. Forum Group owns all of the outstanding stock of Forum Retirement, Inc., the general partner of the Partnership, and also indirectly owns approximately 79% of the outstanding preferred depository units of the Partnership. 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 hereunto duly authorized. FORUM RETIREMENT PARTNERS, L.P., a Delaware Limited Partnership By: FORUM RETIREMENT, INC., GENERAL PARTNER ------------------------------------------- By: /s/ Donald D. Olinger ------------------------------------------- Donald D. Olinger Vice President August 14, 1997 - --------------- Date EX-27 2 FDS --
5 This schedule contains summary financial information extracted from the Retirement Partners, L.P. Condensed Consolidated Balance Sheet and Condensed Consolidated Statement of Operations as of and for the six months ended June 30, 1997 and is qualified in its entirety by reference to such financial statements. 0000804752 Forum Retirement Partners, L.P. 1,000 $ 6-mos Dec-31-1997 Jan-1-1997 Jun-30-1997 1 4,252 0 0 0 0 0 131,564 33,501 114,214 0 47,434 0 0 0 41,354 114,214 29,478 29,478 0 20,715 4,429 0 2,570 1,746 0 1,746 0 0 0 1,746 0 0
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