-----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, AusQiXl32et6BVWQ1crmaSet0FI0r67Oujv9sdvOv00EKsi/ewWbjWnD/xFwKd7m fly59GaHrKfVQB4UEU0xvA== 0000914317-98-000483.txt : 19980812 0000914317-98-000483.hdr.sgml : 19980812 ACCESSION NUMBER: 0000914317-98-000483 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980810 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: RESURGENCE PROPERTIES INC CENTRAL INDEX KEY: 0000929223 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 133757163 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-24740 FILM NUMBER: 98680456 BUSINESS ADDRESS: STREET 1: 411 WEST PUTNAM AVENUE CITY: GREENWICH STATE: CT ZIP: 06830 BUSINESS PHONE: 2038627000 MAIL ADDRESS: STREET 1: 10 UNION SQUARE EAST 5TH FL CITY: NEW YORK STATE: NY ZIP: 10003 10-Q 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1998 Commission file number: 0-24740 RESURGENCE PROPERTIES INC. (Exact name of registrant as specified in its charter) MARYLAND 13-3757163 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) c/o Wexford Management LLC 411 West Putnam Avenue, Greenwich, CT 06830 (Address of principal executive offices) (203) 862-7000 (Registrant's telephone number, including area code) None (Former name, former address and former fiscal year, if changed since last report) 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 [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: As of August 1, 1998, there were 10,000,000 shares of Common Stock, $0.01 par value, outstanding. RESURGENCE PROPERTIES INC. FORM 10-Q TABLE OF CONTENTS PART I - FINANCIAL INFORMATION Item 1. Financial Statements Unaudited Consolidated Statements of Net Assets in Liquidation as of June 30, 1998 and December 31, 1997 Unaudited Consolidated Statements of Changes in Net Assets in Liquidation for the Three Months ended June 30, 1998 and for the Six Months ended June 30, 1998 Unaudited Consolidated Statements of Operations (Going Concern Basis) for the Three Months ended June 30, 1997 and for the Six Months ended June 30, 1997 Unaudited Consolidated Statement of Cash Flows (Going Concern Basis) for the Six Months ended June 30, 1997 Notes to Unaudited Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K SIGNATURES
RESURGENCE PROPERTIES INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF NET ASSETS IN LIQUIDATION (Dollars in thousands except per share amounts) - -------------------------------------------------------------------------------- June 30, 1998 December 31, 1997 ------------- ----------------- ASSETS REAL ESTATE ASSETS ........................ $12,294 $17,121 CASH AND CASH EQUIVALENTS ................. 138 408 RESTRICTED CASH ........................... 500 1,500 ------- ------- TOTAL ASSETS .......................... 12,932 19,029 ------- ------- LIABILITIES MORTGAGE NOTE PAYABLE ..................... 4,436 4,701 ESTIMATED COSTS OF LIQUIDATION ............ 300 470 ACCRUED MANAGEMENT DISTRIBUTION ........... 589 555 REDEEMABLE PREFERRED STOCK ................ 300 300 ------- ------- TOTAL LIABILITIES ..................... 5,625 6,026 ------- ------- COMMITMENTS AND CONTINGENCIES NET ASSETS IN LIQUIDATION ...................... $ 7,307 $13,003 ======= ======= NET ASSETS IN LIQUIDATION PER SHARE (10,000,000 shares outstanding) .......... $ 0.73 $ 1.30 ======= =======
See notes to unaudited consolidated financial statements
RESURGENCE PROPERTIES INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION (Dollars in thousands) - -------------------------------------------------------------------------------- For the three months For the six months Ended June 30, 1998 Ended June 30, 1998 ------------------- ------------------- Net assets in liquidation, beginning of period .... $ 7,289 $ 13,003 Dividend Paid ..................................... -- (6,000) Net changes in net assets in liquidation .......... 18 304 -------- -------- Net assets in liquidation, June 30, 1998 .......... $ 7,307 $ 7,307 ======== ========
See notes to unaudited consolidated financial statements
RESURGENCE PROPERTIES INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (GOING CONCERN BASIS) (Dollars in thousands, except share and per share amounts) - -------------------------------------------------------------------------------- For the three months For the six months ended June 30, ended June 30, 1997 1997 -------------------- ------------------ REVENUES: Minimum rents ............................. $1,846 $4,548 Recoveries from tenants ................... 240 819 Investment income ......................... 157 280 Net gain from asset dispositions .......... 251 3,547 Other ..................................... 156 236 ------ ------ Total revenues ........................ 2,650 9,430 ------ ------ EXPENSES: Property operations ....................... 983 2,378 Interest expense .......................... 124 233 Non-income producing assets ............... 35 98 Management fees ........................... 369 817 General and administrative ................ 165 332 Depreciation and amortization ............. 335 734 ------ ------ Total expenses ........................ 2,011 4,592 ------ ------ INCOME BEFORE INCOME TAXES ..................... 639 4,838 Income Taxes .............................. -- -- ------ ------ NET INCOME ..................................... $ 639 $4,838 ====== ====== NET INCOME PER COMMON SHARE (10,000,000 shares outstanding): ................................. $ 0.06 $ 0.48 ====== ======
See notes to unaudited consolidated financial statements
RESURGENCE PROPERTIES INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS (GOING CONCERN BASIS) (Dollars in thousands) - -------------------------------------------------------------------------------- For the Six Months ended June 30, 1997 -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income .................................................. $ 4,838 Adjustments to reconcile net income to net cash provided by Operating activities: Depreciation and amortization: Operating real estate properties ................... 607 Other assets ....................................... 127 Net gain from asset dispositions ....................... (3,547) Straight-line adjustment for stepped rentals ........... 109 Net changes in operating assets and liabilities ........ (448) -------- Net cash provided by operating activities .......... 1,686 -------- CASH FLOWS FROM INVESTING ACTIVITIES: Net proceeds from sales of assets ...................... 34,555 Net collections on mortgage loans ...................... 299 Improvements to operating properties ................... (574) -------- Net cash provided by investing activities .......... 34,280 -------- CASH FLOWS FROM FINANCING ACTIVITIES: Common Stock Dividends ................................. (25,000) Senior debt repayments, net ............................ (2,490) Mortgage loan repayments ............................... (289) Preferred stock dividends .............................. (14) -------- Net cash used for financing activities ............. (27,793) -------- NET INCREASE IN CASH AND CASH EQUIVALENTS ................... 8,173 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ............ 4,378 -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD .................. $ 12,551 ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest ................................. $ 233 ========
See notes to unaudited consolidated financial statements RESURGENCE PROPERTIES INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) A. ORGANIZATION AND ACCOUNTING POLICIES Resurgence Properties Inc. and its subsidiaries (the "Company") has been engaged in diversified real estate activities. The Company is managed and administered by Wexford Management LLC ("Wexford"). On April 24, 1997, the Board of Directors approved a plan of complete liquidation and dissolution of the Company (the "Plan") which was approved by a majority vote of the shareholders on September 26, 1997. The key features of the Plan are: (1) the cessation of all business activities, other than those in furtherance of the Plan; (2) the sale or disposition of all of the Company's assets; (3) the satisfaction of all outstanding liabilities; (4) the payment of liquidating distributions to shareholders in complete redemption of the Common Stock; and (5) the authorization of the filing of Articles of Dissolution. As a result of the adoption of the Plan, the Company adopted the liquidation basis of accounting effective July 1, 1997, whereby assets are valued at their estimated net realizable values and liabilities are stated at their estimated settlement amounts. The valuation of assets and liabilities requires many estimates and assumptions by management and there are substantial uncertainties in carrying out the provisions of the Plan. The amount and timing of any liquidating distributions will depend upon a variety of factors including, but not limited to, the actual proceeds from the sale of any of the Company's assets, the ultimate settlement amounts of the Company's liabilities and obligations, actual costs incurred in connection with carrying out the Plan, including management fees and administrative costs during the liquidation period, and the timing of the liquidation and dissolution. Accruals totaling approximately $300 have been recorded as of June 30, 1998 for the estimated future costs of liquidating the Company which include, but are not limited to, costs of disposing of the Company's remaining assets and general and administrative costs through the estimated conclusion of liquidation. The accompanying financial statements, notes and discussions should be read in conjunction with the consolidated financial statements, related notes and discussions contained in the Company's annual report on Form 10-K for the year ended December 31, 1997. The interim financial information contained herein is unaudited; however, in the opinion of management, all adjustments necessary for the fair presentation of such financial information have been included. The December 31, 1997 year-end balance sheet data presented herein was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. B. RESTRICTED ASSETS The Company believes that in addition to the costs and expenses associated with facilitating the plan, it is necessary to set aside cash or other assets as a Contingency Reserve of approximately $500. No liability has been accrued for such contingencies. Following the payment, satisfaction or other resolution of such contingencies, the Plan provides that any amounts remaining in the Contingency Reserve shall be distributed to the Company's stockholders. C. REAL ESTATE ASSETS Real estate assets have been recorded at the estimated net realizable values in liquidation. No independent appraisals have been obtained on these assets. The estimated net realizable values have been determined based on contract negotiations, internal analysis, inquiries or offers from prospective purchasers, inquiries of market professionals and expected selling costs and operating results through the anticipated disposal date. D. ASSET SALES During the first quarter ended March 31, 1998, the Company sold the Lawrenceville Industrial Campus and land assets for net proceeds of approximately $4,606 and on July 23, 1998, the Company sold the Cross Creek Business Center for net proceeds of approximately $12,025 of which $4,410 was applied toward the full repayment of the mortgage loan (Note E). E. MORTGAGE NOTE PAYABLE The mortgage note payable represents a 9.75% per annum fixed rate non-recourse first mortgage note maturing on September 1, 1998 and collateralized by the Cross Creek Business Center. This note was repaid on July 23, 1998. (Note D) F. MANAGEMENT AGREEMENT The Management Agreement with Wexford was indefinitely extended during 1998 on a month to month basis subject to cancellation by either party for any reason upon 30 days prior written notice. The Management Fee for 1998 was $10 for the month of January and $22 per month from February through July. The fee has been reduced to $11 per month for the remainder of 1998. G. ACCRUED MANAGEMENT DISTRIBUTION Pursuant to the approved Plan of Liquidation, management distributions are payable in the amount equal to ten percent of all distributions made to stockholders of the Company in excess of $8.50 per share (inclusive of the $2.50 per share dividend paid on April 14, 1997). Including the distribution to be paid on August 14, 1998 (Note H) total distributions paid to date will be $8.95 per share. Management distributions of $589 were accrued as of June 30, 1998. H. SUBSEQUENT EVENT On July 27, 1998 the Board of Directors declared the fifth liquidating dividend of $.65 per share to Common shareholders of record as of August 6, 1998. This dividend will be paid on August 14, 1998. In addition, the Board of Directors also authorized the Company to redeem all of the outstanding Series I Preferred Stock (300,000 shares) on August 14, 1998 at $1.00 per share plus all undeclared and unpaid dividends thereon. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following section includes a discussion and analysis of the results of the Company for the six months ended June 30, 1998. Plan of Liquidation On April 24, 1997, the Board of Directors approved a plan of complete liquidation and dissolution of the Company (the "Plan") which was approved by a majority vote of the shareholders on September 26, 1997. The key features of the Plan are: (1) the cessation of all business activities, other than those in furtherance of the Plan; (2) the sale or disposition of all of the Company's assets; (3) the satisfaction of all outstanding liabilities; (4) the payment of liquidating distributions to shareholders in complete redemption of the Common Stock; and (5) the authorization of the filing of Articles of Dissolution. The amount and timing of any liquidating distributions will depend upon a variety of factors including, but not limited to, the actual proceeds from the sale of any of the Company's assets, the ultimate settlement amounts of the Company's liabilities and obligations, actual costs incurred in connection with carrying out the Plan, including management fees and administrative costs during the liquidation period, and the timing of the liquidation and dissolution. Accruals totaling approximately $300,000 have been recorded as of June 30, 1998 for the estimated future costs of liquidating the Company which include, but are not limited to, costs of disposing of the Company's remaining assets and general and administrative costs through the estimated conclusion of liquidation. The Company believes that in addition to the costs and expenses associated with facilitating the Plan, it is necessary to set aside a Contingency Reserve in the amount of approximately $500,000. No liability has been accrued for such contingencies. Following the payment, satisfaction or other resolution of such contingencies, the Plan provides that any amounts remaining in the Contingency Reserve shall be distributed to the Company's stockholders. Results of Operations - General The Company has disposed of substantially all of its portfolio. The future performance of the Company's portfolio of assets will be subject to prevailing economic conditions and to financial, business and other factors, including the future performance of the real estate market, the availability of financing to prospective asset purchasers, the timing of the liquidation of the Company and to other factors beyond the Company's control. For these reasons, the results of the Company's operations from period to period may not be comparable. During the first quarter ended March 31, 1998, the Company sold the Lawrenceville Industrial Campus and land assets for net proceeds of approximately $4,606,000. On July 23, 1998, the Company sold the Cross Creek Business Center for net proceeds of approximately $12,025,000 of which $4,410,000 was applied toward the full repayment of the mortgage loan. Liquidity and Capital Resources The Company's primary objectives are to liquidate its assets in the shortest time period possible while realizing the maximum values for such assets and reduction of operating costs. Although the Company considers its assumptions and estimates as to the values and timing of such liquidations to be reasonable, the period of time to liquidate the assets and distribute the proceeds of such assets is subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control. The Company currently has one asset remaining which it is trying to sell. Assuming the sale of such asset and satisfaction of its obligations, the Company anticipates making a final liquidating distribution to shareholders in January 1999. On July 27, 1998, the Board of Directors declared the fifth liquidating dividend of $.65 per share to common shareholders of record as of August 6, 1998 and approved the redemption of all of the Series I Preferred Stock (300,000 shares) at $1.00 per share plus all undeclared and unpaid dividends thereon. This dividend and preferred stock redemption will be paid on August 14, 1998. The source of funds for such dividend and redemption was from the cash generated from the sale of the Cross Creek Business Center. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K: (a) Exhibits: None (b) Reports on Form 8-K: None 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. Resurgence Properties Inc. Date: August 10, 1998 By: /s/ Joseph M. Jacobs --------------------- Joseph M. Jacobs Chief Executive Officer and President (Duly Authorized Officer) Date: August 10, 1998 By: /s/ Jay L. Maymudes -------------------- Jay L. Maymudes Chief Financial Officer, Vice President and Secretary (Principal Financial and Accounting Officer and Duly Authorized Officer) EX-27 2
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS CONTAINED IN ITEM 8 TO THE RESURGENCE PROPERTIES INC. 1998 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1998 JUN-30-1998 638,000 0 0 0 0 638,000 0 0 12,932,000 0 4,436,000 300,000 0 0 7,307,000 12,932,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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