SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 16, 1997
United Vanguard Homes, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-5097 11-2032899
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(State or other jurisdiction) (Commission (IRS Employer
File Number) Identification No.)
4 Cedar Swamp Road, Glen Cove, NY 11542
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 759-1188
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N/A
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(Former name or former address, if changed since last report.)
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Item 5. OTHER EVENTS.
In Fiscal 1997, United Vanguard Homes, Inc. ("Registrant") had the
right to purchase the 300-unit/60-skilled nursing bed Harvest Village retirement
community located in Atco, New Jersey ("Harvest Village") from an affiliate of
Vanguard for $17.4 million, consisting of (i) $13,500,000, (ii) the cancellation
of $6,094,000 of indebtedness due to Registrant from Vanguard Ventures, Inc.,
Registrant's parent company ("Vanguard"), and (iii) the assignment to Vanguard
of the $7.5 million Promissory Note due from the Harvest Village lessee Gateway
Communities, Inc. ("GCI Note"). The intercompany debt and assignment of the GCI
Note was valued by the parties based upon an appraisal, at $3.9 million.
In connection with the restructuring of the construction loan for
Harvest Village in 1990, the construction lenders required Vanguard to make a $7
million loan guaranty. This guaranty, $6,350,000 as of March 31, 1997, was
secured by a subordinate mortgage on Olds Manor, a retirement facility owned by
Registrant, in the amount of $1.4 million and a subordinate mortgage on The
Whittier, a retirement facility owned by Vanguard, in the amount of $1 million.
The Whittier mortgage was cross-collateralized with subordinate mortgages on
Hillside Terrace and The Whitcomb, retirement facilities owned by Registrant. As
of March 31, 1997, the guaranty was also secured by 1,340,573 shares of
Registrant's stock owned by Vanguard. Carl G. Paffendorf, Registrant's Chief
Executive Officer ("Paffendorf"), had guaranteed $1.00 of the Harvest Village
construction loan (to increase to the amount of the Vanguard guaranty if Harvest
Village Partners, L.P., the owner of the Harvest Village retirement community,
filed for bankruptcy or certain other events occurred).
In July 1997, (i) Registrant's right to purchase the Harvest Village
retirement facility terminated, (ii) Vanguard contributed substantially all of
its equity interest in Harvest Village Partners, L.P. to Registrant, (iii)
Registrant and Vanguard transferred 100 percent of Harvest Village Partners,
L.P. to unaffiliated purchasers, assigned their mortgage on the Harvest Village
retirement facility to a company not affiliated with Registrant, and (iv) the
Harvest Village construction lenders, Citibank, N.A, and Lloyds Bank Plc,
released their liens and security interests in Registrant's properties and the
stock of Registrant owned by Vanguard and released Vanguard and Paffendorf from
their guarantees.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UNITED VANGUARD HOMES, INC.
August 4, 1997
by: /s/ Carl G. Paffendorf
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Carl G. Paffendorf
Chairman of the Board and
Chief Executive Officer
