<PAGE> 1
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) August 18, 1995
. . . . . . . . . . . . . . .
Vinland Property Trust
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Exact name of registrant as specified in its charter)
California 0-8003 94-2432628
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
3878 Oak Lawn, Suite 300, Dallas, Texas 75219
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 522-9910
. . . . . . . . . . . . . . .
Not Applicable
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Former name or former address, if changed since last report)
<PAGE> 2
Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
Incorporation by reference is made to Form 10-K Annual Report to the
Securities and Exchange Commission for the fiscal year ended November 30, 1994
(the "1994 Form 10-K") of Vinland Property Trust (the "Trust") under Item 2,
Properties, for a description of a tax-free exchange contract involving the
Westover Valley Apartments ("Westover") and the Riverside Apartments
("Riverside"). On August 18, 1995, the Trust closed the exchange of Westover
for Riverside. See Item 5, "Other Events."
Item 5. OTHER EVENTS.
On August 8, 1994, the Trust entered into a tax-free exchange contract
involving Westover located in Fort Worth, Texas, owned by the Trust, and
Riverside located in Austin, Texas, owned by an unaffiliated corporation named
SSNA Properties Corporation ("SSNA"). On August 18, 1995, the Trust closed the
exchange of Westover for Riverside. On August 8, 1994, deeds to the properties
had been placed in escrow and the Trust had leased Riverside pending completion
of the exchange for the sum of $40,116 per month for twelve months and $35,116
per month for the remainder of the lease term, which sum represented the
monthly debt service on the existing mortgage encumbering Riverside in favor of
Federal National Mortgage Association ("FNMA") in the amount of $35,116 plus
$5,000. The Trust also assumed a $240,000 obligation of SSNA which bore
interest at 10% per annum. As collateral therefor, the Trust pledged a $600,000
promissory note. At the exchange closing, the outstanding principal balance on
the original $240,000 obligation was paid in full. The original exchange
agreement required the parties to exchange the properties when the construction
loan obtained by the Trust for Westover reached an amount which then
approximated the amount of the existing FNMA mortgage encumbering Riverside.
Westover has been closed for several years and in connection with the exchange
contract was to be completely rehabilitated with funds drawn on a $4.7 million
construction loan obtained by the Trust, which construction loan is secured by
Westover and a guarantee from the principals of SSNA. Riverside is a 145-unit
renovated apartment complex in 11 three-story apartment buildings situated on
3.88 acres of land near downtown Austin, Texas. Riverside's 145 units are a mix
of efficiency, 1, 2 and 3 bedroom apartments, with an average size of 765
square feet, and is presently operated as a residential apartment complex.
Riverside is owned by Vinland Riverside Partners, L.P., a Texas
limited partnership (the "Partnership"), in which the Trust is the limited
partner owning a 99% interest in the Partnership. Vinland Property Investors,
Inc., which is 100% beneficially owned by the Trust, is the general partner and
owns a 1% interest in the Partnership. The Partnership has assumed the FNMA
loan with an outstanding balance of $2.9 million. The Trust paid an assumption
fee of $28,850. Such loan matures September 1, 1999 and bears an interest rate
of 8.5% per annum.
On September 7, 1995, the United States Bankruptcy Court for the
Northern District of Illinois, Eastern Division (the "Court"), entered its
order in the case styled In
-1-
<PAGE> 3
re: Polynesia Village Associates, requiring the debtor in such case, an
Illinois limited partnership, to execute and deliver to an "Escrow Agent" a
Quitclaim Deed from the debtor to and in favor of the Trust and the Trust paid
to debtor the sum of $75,000. Such order requires the Trust, between January 1,
1996, and February 22, 1996, to deliver $100,000 in cash to the Escrow Agent,
who, upon receipt thereof, is directed to simultaneously deliver such cash to
counsel for debtor and the Quitclaim Deed to the Trust or its nominee. At the
time of entry of such order, all decisions concerning the property known as
Polynesia Village Apartments, located in Tacoma, Washington, are to be made
exclusively by the Trust and the Trust has agreed to indemnify and hold debtor
and its general partners harmless from and against any and all liability for
damages, claims, demands, actions, causes of action, etc. arising from and
after September 7, 1995 in connection with such property or the Trust's
operation and management of such property.
Prior to November 30, 1994, the Trust had classified the $1.8 million
second lien mortgage note secured by the Polynesia Village Apartments as
non-performing. Such mortgage note originally matured in December 1991, but the
debtor filed for Chapter 11 bankruptcy protection in 1992 and a Plan of
Reorganization was confirmed by the Court in June 1994. The Polynesia Village
Apartments are subject to senior underlying debt not presently in default in
the amount of $5.8 million which must continue to be serviced. The order
entered September 7, 1995, was the result of a negotiated settlement among the
parties.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
None. The exchange transaction involving Westover and
Riverside occurred in 1994 for all practical purposes and Riverside
has been included in the Trust's financial statements as a leased
property.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits. The following exhibits are filed herewith:
<TABLE>
<CAPTION>
EXHIBIT
DESIGNATION DESCRIPTION OF EXHIBIT
<S> <C>
10.1 Order entered September 7, 1995 by the United States
Bankruptcy Court for the Northern District of Illinois,
Eastern Division, in the case styled In re: Polynesia
Village Associates
</TABLE>
-2-
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
VINLAND PROPERTY TRUST
(Registrant)
By /s/ KATIE JACKSON
-----------------------------------
Katie Jackson, Vice President and
Chief Accounting Officer
Dated: September 27, 1995
-3-
<PAGE> 5
EXHIBIT INDEX
Exhibit 10.1 - Order entered September 7, 1995 by the United States
Bankruptcy Court for the Northern District of
Illinois, Eastern Division in the case styled In re:
Polynesia Village Associates
<PAGE> 1
EXHIBIT 10.1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
In re: ) Chapter II
POLYNESIA VILLAGE ASSOCIATES, ) Case No. 92 B 19309
Debtor. ) Hon. Susan Pierson Sonderby
AGREED ORDER
THIS CAUSE coming on to be heard at a settlement conference on Vinland
Property Trust's ("Vinland") Second Motion for Entry of an Order, Pursuant to
11 U.S.C. Section 1142(b), Directing the Reorganized Debtor to Immediately
Execute and Deliver a Quitclaim Deed ("Motion"); Polynesia Village Associates
("Debtor") having appeared at the settlement conference by and through Michael
Kolodny, Jeffrey Kolodny and Steven Nagler, who collectively represent both of
the Debtor's general partners, and its counsel, Bruce Friedman; Vinland having
appeared at the settlement conference by and through its President, William
Friedman, and its counsel, Melanie Rovner Cohen and Michael M. Eidelman; the
Court having heard statements of the parties with respect to the Motion and
having negotiated a settlement, as set forth below, acceptable to both Vinland
and the Debtor; counsel for the holder of the first mortgage on the Property
(as that term is defined in the Motion), State Street Bank & Trust Co., Trustee
for 1992-M1 Series Pass Through Certificates having reviewed this Order and
having no objections to its entry; and the Court being otherwise fully advised
in the premises;
NOW, THEREFORE, IT IS HEREBY ORDERED THAT:
1. Within three (3) days of the entry of this Order, Debtor shall
execute the Quitclaim Deed ("Deed") attached hereto as Exhibit "A" and deliver
same to Melanie Rovner Cohen in her capacity as Escrow Agent ("Escrow Agent");
2. Simultaneously with the delivery of the Deed, Debtor and
Vinland shall execute the Escrow Agreement, in substantially the form of
attached Exhibit "B", and deliver same to the Escrow Agent;
3. Upon the Escrow Agent's receipt of the Deed, Vinland shall pay
the Debtor the sum of $75,000;
4. Between January 1, 1996 and February 22, 1996, Vinland or its
nominee shall deliver $100,000 in cash or in the form of a cashier's or
certified check payable to the Debtor ("Proceeds"), to the Escrow Agent. The
Escrow Agent is authorized and directed to simultaneously deliver the Proceeds
to Bruce Friedman and the Deed to Vinland or its nominee;
<PAGE> 2
5. Effective immediately, all decisions concerning the Property,
including, without limitation, decisions concerning the painting, repair or
sale of the Property, shall be made exclusively by Vinland. Debtor shall not be
entitled to any information concerning the Property, including, without
limitation, information prepared by the manager of the Property, other than
operating statements concerning the Property prepared by Vinland in the
ordinary course. Vinland agrees to indemnify and hold Debtor and its general
partners harmless from and against any and all liability for damages, claims,
demands, actions, causes of action, suits, costs, penalties and expenses,
including, but not limited to attorneys' fees, for occurrences arising from and
after the date hereof, in connection with the Property or Vinland's operation
or management of the Property;
6. Obligations of the Debtor that are not directly related to the
operation of the Property in the ordinary course, including, without
limitation, liabilities to third persons for legal (other than for tenant
evictions), accounting and "general partner" fees, shall be satisfied directly
by the Debtor, and not from cash generated by the Property. Vinland shall cause
obligations of the Debtor that are directly related to the operation of the
Property in the ordinary course, other than obligations covered by insurance
policies or tort or liability claims, if any, to be paid from cash generated by
the Property.
7. Subject to the terms of the Escrow Agreement, the Debtor and
its general partners hereby relinquish all of their interest in the Property,
including without limitation, any personalty located at the Property and any
bank accounts in the Debtor's name that are not located in Chicago.
Furthermore, the Debtor and its general partners expressly acknowledge that no
funds are owed to any of them for services rendered or to be rendered at the
Property which are recoverable from the Property or from funds generated by the
Property. Nothing contained herein shall be interpreted to abrogate Vinland's
payment obligation as set forth in Paragraph 4 above.
8. Vinland, the Debtor and the Debtor's general partners shall
take such further action as may be required to carry out the transactions
contemplated herein, including, without limitation, the execution of such other
documents as may be reasonably necessary. Debtor shall not be responsible for
payment of transfer taxes or recording fees upon recordation of the Deed;
9. Regardless of whether this case is ultimately dismissed, Judge
Ronald J. Barliant shall have jurisdiction to resolve any disputes relating to
this Order or to enforce the terms hereof;
10. Other than as specifically set forth herein and in that
certain Release, Indemnity and Hold Harmless Agreement, executed by the Debtor
and Vinland on May 2, 1995, Vinland and the Debtor, for themselves and their
respective officers, directors, general partners, agents, attorneys,
representatives, affiliates, successors and assigns, hereby release, to the
fullest extent possible, each other from any and all claims, demands, causes of
action, suits, costs, damages, penalties, expenses, liabilities, and
obligations, arising at any time prior to the date hereof or at any time in the
future;
<PAGE> 3
11. Vinland may record the Deed at any time after its receipt.
Until such time as the Deed is recorded, the Debtor shall be named as an
additional insured on any insurance policies covering the Property; and
12. The Motion is hereby withdrawn.
Dated: September 7, 1995 ENTER:
ENTERED
SEP 7 1995
-----------------------------------
Honorable Susan Pierson Sonderby
United States Bankruptcy Judge
AGREED AND ACCEPTED:
Vinland Property Trust
By: /s/ MICHAEL M. EIDELMAN
-----------------------------------
One of Its Attorneys
Michael M. Eidelman
ALTHEIMER & GRAY
10 South Wacker Drive
Suite 4000
Chicago, IL 60606
(312) 715-4000
Polynesia Village Associates
By: /s/ BRUCE M. FRIEDMAN
-----------------------------------
One of Its Attorneys
Bruce M. Friedman
Joel A. Stein
LASER POKORNY SCHWARTZ
FRIEDMAN & ECONOMOS, P.C.
205 N. Michigan Avenue
Suite 3800
Chicago, IL 60601
(312) 540-0600
<PAGE> 4
FILED FOR RECORD AT REQUEST OF
WHEN RECORDED RETURN TO
Name
--------------------------------------------------
Address
-----------------------------------------------
City, State
-------------------------------------------
================================================================================
QUIT CLAIM DEED
THE GRANTOR, POLYNESIA VILLAGE ASSOCIATES, an Illinois limited partnership
keys and quit claims to
following described real estate, situated in the County of Pierce State of
Washington, other with all after acquired title of the grantor(s) therein:
(See attached Legal Description)
Dated: August , 1995
POLYNESIA VILLAGE ASSOCIATES, an Illinois
limited partnership
By: Its General Partners
-----------------------------------
Michael Kolodny
Hallmark Equities III, Inc.
By:
-----------------------------------
Its: President
================================================================================
STATE OF ILLINOIS )
) ss.
COUNTY OF COOK )
On this ___ day personally appeared Michael A. Kolodny to me known
to be the individual described in and ________ executed the foregoing
instrument, and acknowledged that he signed the same ________ free and
voluntary act and deed, ________ and purposes therein mentioned.
________ under my hand and official seal this day of August , 1995.
Notary Public in and for the State of Illinois
residing at ________________
STATE OF ILLINOIS )
) ss.
COUNTY OF COOK )
On this ___ day of August 1995 before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Jeffrey Kolodny to me known to be the President of Hallmark
Equities, Inc. the corporation that executed the foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of
said corporation, for the uses and purposes therein mentioned, and on oath
stated that he is authorized to execute the said instrument and that the seal
affixed is the corporate seal of said corporation.
Witness my hand and official seal hereto affixed the day and year
first above written.
Notary Public and for the State of Illinois
residing at ________________
<PAGE> 5
EXHIBIT "A"
PARCEL A:
Commencing at the Northeast corner of the Southeast 1/4 of the Southwest 1/4 of
Section 35, Township 21 North, Range 2 East of the W.M.; THENCE South 00
degrees 01'17" East along the East line of the Southwest 1/4 of Section 35,
825.00 feet; THENCE North 89 degrees 53'07" West 720.00 feet; THENCE North 00
degrees 01'17" West, 130.00 feet; THENCE North 89 degrees 53'07" West 276.00
feet; THENCE South 30 degrees 49'20" West 87.77 feet; THENCE North 89 degrees
53'07" West 80.00 feet to the true point of beginning; THENCE South 89 degrees
53'07" East 80.00 feet; THENCE North 30 degrees 49'20" East 87.77 feet; THENCE
South 89 degrees 53'07" East 106.00 feet to a point on a curve to the left
having a tangent at this point which bears North 12 degrees 25'42" West; THENCE
Northwesterly along said curve having a radius of 475.00 feet, a central angle
of 35 degrees 06'46" for an arc length of 291.10 feet; THENCE North 29 degrees
58'43" East 164.75 feet; THENCE North 60 degrees 01'17" West 125.00 feet;
THENCE North 00 degrees 01'17" West 242.09 feet to the North line of the
Southeast 1/4 of the Southwest 1/4 of Section 35; THENCE South 89 degrees
53'07" East along said North line 30.00 feet; THENCE North 00 degrees 01'17"
West 99.39 feet to a point on a curve to the right having a tangent at this
point which bears South 57 degrees 19'26" West; THENCE Southwesterly along said
curve having a radius of 630.00 feet, a central angle of 18 degrees 31'21" for
an arc length of 203.67 feet; THENCE South 75 degrees 50'47" West 71.21 feet;
THENCE South 02 degrees 58'01" East 98.59 feet; THENCE South 06 degrees 15'54"
West 378.91 feet to the West line of the Southeast 1/4 of the Southwest 1/4 of
Section 35; THENCE South 00 degrees 07'04" East along said West line 595.00
feet; THENCE South 23 degrees 00'00" East 115 feet, more or less, to the North
Right-of-Way line of Primary State Highway No. 14 as conveyed to the State of
Washington by Deed recorded under Auditor's File No. 1728994; THENCE Easterly
along said Right-of-Way line to a point South 00 degrees 07'04" East of the
true point of beginning; THENCE North 00 degrees 07'04" West 400.12 feet to the
true point of beginning.
Situate in the City of Tacoma, County of Pierce, State of Washington.
LEGAL DESCRIPTION CONTINUED
<PAGE> 6
PARCEL B:
Commencing 825.00 feet South 0 degrees 01'17" East and 50.00 North 89 degrees
53'07" West of the Northeast corner of the Southeast 1/4 of the Southwest 1/4
of Section 35, Township 21 North, Range 2 East of the W.M.; THENCE North 89
degrees 53'07" West 210.00 feet to the true point of beginning; THENCE North 89
degrees 53'07" West 460.00 feet; THENCE North 0 degrees 01'17" West parallel to
East line of said subdivision a distance of 825.00 feet to North line of said
subdivision; THENCE North 89 degrees 52'13" West along said North line 339.00
feet; THENCE South 0 degrees 01'17" East parallel to said East line 242.09
feet; THENCE South 60 degrees 01'17" East 125.00 feet; THENCE South 29 degrees
58'43" West 164.75 feet to a point on a curve to the right having a tangent
bearing at this point South 47 degrees 32'28" East; THENCE Southeasterly along
said curve having a radius of 475.00 feet through a central angle of 35 degrees
06'46" for an arc length of 291.10 feet; THENCE North 89 degrees 53'07" West
106.00 feet; THENCE South 30 degrees 49'20" West 87.77 feet; THENCE North 89
degrees 53'07" West 80.00 feet; THENCE South 0 degrees 07'04" East 400.12 feet
to a point on the North line of Right-of-Way of Primary State Highway No. 14 as
conveyed to the State of Washington by Deed recorded under Auditor's File No.
1728994; THENCE Easterly along said North Right-of-Way line to a point located
South 00 degrees 01'17" East from the true point of beginning; THENCE North 00
degrees 01'17" West 286.86 feet to the true point of beginning.
Situate in the City of Tacoma, County of Pierce, State of Washington.
PARCEL C:
Commencing at the Northeast corner of the Southeast 1/4 of the Southwest 1/4 of
Section 35, Township 21 North, Range 2 East of the W.M.; THENCE South 0 degrees
01'17" East along the East line of said subdivision 825.00 feet; THENCE North
89 degrees 53'07" West 90.00 feet to the true point of beginning; THENCE
continuing North 89 degrees 53'07" West 170.00 feet; THENCE South 0 degrees
01'07" East parallel with the East line of said Southeast 1/4 of the Southwest
1/4 of Section 35, 225.21 feet to a line parallel with and 60.00 feet Northerly
as measured at right angles thereto; of the Northerly Right-of-Way line of
Primary State Highway No. 14, as conveyed to the State of Washington by Deed
recorded under Auditor's File No. 1728994; THENCE North 76 degrees 42'43" East
along said parallel line 174.66 feet to a line parallel with and 90.00 feet
West of East line of the Southeast 1/4 of the Southwest 1/4 of said Section 35;
THENCE North 0 degrees 01'17" West along said parallel line 184.73 feet to the
true point of beginning.
Situate in the City of Tacoma, County of Pierce, State of Washington.
LEGAL DESCRIPTION CONTINUED
<PAGE> 7
PARCEL D:
Commencing at the Northeast corner of the Southeast 1/4 of the Southwest 1/4 of
Section 35, Township 21 North, Range 2 East of the W.M.; THENCE South 0 degrees
01'17" East along the East line of said subdivision 825.00 feet; THENCE North
89 degrees 53'07" West 50.00 feet to the West line of Pearl Street and the True
Point of Beginning; THENCE continuing North 89 degrees 53'07" West 40 feet to
the East line of the above described Parcel C; THENCE South 0 degrees 01'17"
East along said East line 184.73 feet to the Southeast corner of said Parcel C;
THENCE South 76 degrees 42'43" West along the South line of said Parcel C, said
line being parallel with and 60 feet Northerly, as measured at right angles to
the Northerly Right-of-Way line of Primary State Highway No. 14, as conveyed to
the State of Washington by Deed recorded under Auditor's File No. 1728994,
174.66 feet, to intersect the most Easterly line of the above described Parcel
B; THENCE South 0 degrees 01'17" East, along the most Easterly line of said
Parcel B, to intersect said Northerly Right-of-Way line of Primary State
Highway No. 14; THENCE Easterly along said Northerly Right-of-Way line, to a
point on the West line of Pearl Street, said point being 50 feet West of the
East line of said Southeast 1/4 of the Southwest 1/4 of Section 35; THENCE
North 0 degrees 01'17" West along a line parallel with the East line of said
subdivision, 236.85 feet to the point of beginning.
Situate in the City of Tacoma, County of Pierce, State of Washington.
<PAGE> 8
Escrow Agreement
Chicago, IL September 7, 1995
Simultaneously with the execution and delivery of this Escrow
Agreement, Polynesia Village Associates ("Debtor") has delivered the attached
Quitclaim Deed (the "Deed"), receipt of which is hereby acknowledged, to
Melanie Rovner Cohen as Escrow Agent ("Escrow Agent"). Upon her receipt from
Vinland Property Trust ("Vinland") or its nominee of $100,000.00 in cash or in
the form of a cashier's or certified check made payable to the Debtor
("Proceeds"), the Escrow Agent is hereby authorized and directed to
simultaneously deliver the Deed to Vinland or its nominee and the Proceeds to
Bruce Friedman. The proceeds shall be delivered to the Escrow Agent between
January 1, 1996 and February 22, 1996. In the event the Escrow Agent does not
receive the Proceeds by February 23, 1996, Escrow Agent is authorized and
directed to return the Deed to the Debtor.
Escrow Agent is hereby expressly authorized to disregard any and all
notices or warnings given by any one of the parties hereto regarding the deed
or by any other person or corporation. The Escrow Agent is hereby expressly
authorized to regard and to comply with and obey any and all orders, judgments
or decrees entered by the Honorable Susan Pierson Sonderby, the bankruptcy
judge presiding over Debtor's bankruptcy case, in Case No. 92 B 19309. In the
event that the Escrow Agent obeys or complies with any such order, judgment or
decree, she shall not be liable to any of the parties hereto or any other
person, firm or corporation by reason of such compliance, notwithstanding that
any such order, judgment or decree is subsequently reversed, modified,
annulled, set aside or vacated.
The parties hereto agree that they shall hold the Escrow Agent
harmless and indemnify her in connection with any acts taken or not taken by
her relating to this Agreement. Any expenses which the Escrow Agent incurs in
connection with the preparation and administration of this Escrow Agreement
shall be borne by Vinland. Any expenses, including without limitations
attorneys' fees and expenses, which the Escrow Agent incurs as a result of a
breach of the provisions of this Escrow Agreement by either Vinland or the
Debtor, shall be borne by the party causing the breach.
Polynesia Village Associates "Debtor" Vinland Property Trust "Vinland"
By: By:
--------------------------------- ---------------------------------
Its: Its:
--------------------------------- ---------------------------------
Accepted: Melanie Rovner Cohen, Escrow Agent
By:
---------------------------------
