FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 0-9136
ANGELES PARTNERS VIII
(Exact name of small business issuer as specified in its charter)
California 95-3264317
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
(Issuer's telephone number) (864) 239-1000
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) ANGELES PARTNERS VIII
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 1997
Assets
Cash and cash equivalents:
Unrestricted $ 290
Restricted--tenant security deposits 71
Accounts receivable 10
Escrows for taxes 96
Other assets 238
Investment properties:
Land $ 543
Buildings and related personal property 14,519
15,062
Less accumulated depreciation (10,093) 4,969
$ 5,674
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 25
Tenant security deposits 72
Accrued taxes 485
Accrued interest 1,779
Other liabilities 200
Note payable to affiliate 371
Mortgage notes payable 16,713
Partners' Deficit
General partner $ (174)
Limited partners (11,855 units (13,797) (13,971)
issued and outstanding)
$ 5,674
See Accompanying Notes to Consolidated Financial Statements
b) ANGELES PARTNERS VIII
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Revenues:
Rental income $ 926 $ 860 $ 1,816 $ 1,706
Interest income 1 1 2 3
Other income 54 41 92 86
Total revenues 981 902 1,910 1,795
Expenses:
Operating 258 266 510 537
General and administrative 35 52 65 80
Maintenance 114 102 228 190
Depreciation 167 149 330 296
Interest 460 443 913 889
Property taxes 132 199 264 300
Total expenses 1,166 1,211 2,310 2,292
Net loss $ (185) $ (309) $ (400) $ (497)
Net loss allocated to general
partner (1%) $ (2) $ (3) $ (4) $ (5)
Net loss allocated to limited (183) (306) (396) (492)
partners (99%) $ (185) $ (309) $ (400) $ (497)
Net loss per limited
partnership unit $(15.43) $(25.53) $(33.40) $(41.05)
See Accompanying Notes to Consolidated Financial Statements
c) ANGELES PARTNERS VIII
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
For the Six Months Ended June 30, 1997
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Original capital contributions 12,000 $ 121 $ 12,000 $ 12,121
Partners' deficit at
December 31, 1996 11,855 $ (170) $(13,401) $(13,571)
Net loss for the six months
ended June 30, 1997 -- (4) (396) (400)
Partners' deficit at
June 30, 1997 11,855 $ (174) $(13,797) $(13,971)
See Accompanying Notes to Consolidated Financial Statements
d) ANGELES PARTNERS VIII
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands, except unit data)
Six Months Ended
June 30,
1997 1996
Cash flows from operating activities:
Net loss $ (400) $ (497)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 330 296
Amortization of loan costs 28 24
Change in accounts:
Restricted cash (9) (5)
Accounts receivable (4) 6
Escrows for taxes 2 (99)
Other assets (38) (7)
Accounts payable (38) (12)
Tenant security deposit liabilities 10 5
Accrued taxes 75 132
Accrued interest 294 278
Other liabilities 49 35
Net cash provided by
operating activities 299 156
Cash flows from investing activities:
Deposits to restricted escrows -- (404)
Receipts from restricted escrows -- 417
Property improvements and replacements (107) (570)
Net cash used in investing
activities (107) (557)
Cash flows from financing activities:
Payments on mortgage notes payable (95) (22)
Repayment of mortgage notes payable -- (9,368)
Proceeds from long-term borrowings -- 9,800
Loan costs paid -- (174)
Net cash (used in) provided by
financing activities (95) 236
Net increase (decrease) in cash and cash equivalents 97 (165)
Cash and cash equivalents at beginning of period 193 330
Cash and cash equivalents at end of period $ 290 $ 165
Supplemental disclosure of cash flow information:
Cash paid for interest $ 593 $ 587
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARTNERS VIII
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1997
NOTE A - GOING CONCERN
The accompanying financial statements have been prepared assuming Angeles
Partners VIII (the "Partnership") will continue as a going concern. The
Partnership has incurred recurring operating losses and continues to suffer from
poor liquidity. In addition, the Partnership is in default on a portion of its
mortgage notes payable and does not generate sufficient cash flows to meet
current debt-service requirements on its subordinated debt.
The Partnership incurred an operating loss of approximately $400,000 for the six
months ended June 30, 1997, and Angeles Realty Corporation (the "General
Partner") expects this trend to continue. The Partnership generated net cash
from operations of approximately $299,000; however, interest expense of
approximately $294,000 was accrued during the six months ended June 30, 1997 on
the note payable to an affiliate and the second mortgages securing the
Partnership's investment properties.
The Partnership's second mortgage to Angeles Mortgage Investment Trust ("AMIT")
in the amount of $1,350,000 plus accrued interest, which is secured by Bercado
Shores Apartments, has been in default since 1993 due to nonpayment of interest
and the maturity of the note in 1995. This indebtedness is recourse to the
Partnership and the estimated fair value of this property is less than the total
of its first and second mortgages. Since the default in March of 1993, AMIT has
not indicated its intent to pursue its available remedies under the mortgage
agreement; however, this property remains subject to foreclosure under the terms
of the second mortgage agreement. The Partnership has initiated discussions
with AMIT and hopes to negotiate a work-out, however there can be no assurances
that the Partnership's negotiations will prove successful.
The Partnership's note payable and accrued interest of approximately $512,000
due to Angeles Acceptance Pool, L.P. ("AAP") matures in November of 1997. The
Partnership is currently in negotiations with the lender and hopes to either
extend this note or settle the liability at a reduced amount.
There can be no assurance that these negotiations with the lenders will be
successful. No other sources of additional financing are apparent and the
General Partner currently has not developed alternative plans to remedy the
liquidity problems the Partnership is currently experiencing.
The General Partner anticipates that Brittany Point will generate sufficient
cash flows for the next twelve months to meet its operating expenses, debt
service requirements and to fund capital expenditures. The General Partner
anticipates that Bercado Shores will generate sufficient cash flows for the next
twelve months to cover its operating expenditures, however it is not expected to
be able to completely fund desired capital expenditures or to pay its scheduled
debt service on its second mortgage to AMIT. The Partnership's plan is to fund
these items to the extent of available cash flow. The Partnership will fund its
administrative expenses for the next twelve months by using cash on hand at June
30, 1997, and cash flow generated during 1997.
The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or amounts and
classification of liabilities that may result from this uncertainty.
NOTE B - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of the Partnership
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-QSB and
Item 310(b) of Regulation S-B. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of the General Partner, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three and six
month periods ended June 30, 1997, are not necessarily indicative of the results
that may be expected for the year ended December 31, 1997. For further
information, refer to the financial statements and footnotes thereto included in
the Partnership's annual report on Form 10-KSB for the year ended December 31,
1996.
Principles of Consolidation
In order to facilitate the refinancing of the first mortgage indebtedness
secured by Brittany Point in January 1996, the property was transferred to a
lower-tier partnership known as Brittany Point AP VIII, L.P. in which the
Partnership effectively owns a 99.99% limited partnership interest. The
financial statements include all of the accounts of the Partnership and its
majority owned partnership. All significant interpartnership balances have been
eliminated.
NOTE C - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership activities.
The Partnership Agreement provides for payments to affiliates of the General
Partner for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following payments were made to
the General Partner and affiliates in the six months ended June 30, 1997 and
1996, respectively:
1997 1996
(in thousands)
Property management fees $ 94 $ 89
Reimbursement for services of affiliates 46 56
The Partnership insures its properties under a master policy through an agency
and insurer unaffiliated with the General Partner. An affiliate of the General
Partner acquired, in the acquisition of a business, certain financial
obligations from an insurance agency which was later acquired by the agent who
placed the current year's master policy. The current agent assumed the
financial obligations to the affiliate of the General Partner, who receives
payments on these obligations from the agent. The amount of the Partnership's
insurance premiums accruing to the benefit of the affiliate of the General
Partner by virtue of the agent's obligation is not significant.
In November 1992, Angeles Acceptance Pool, L.P. ("AAP"), a Delaware limited
partnership which now controls the working capital loan previously provided by
Angeles Capital Investment, Inc. ("ACII"), was organized. Angeles Corporation
("Angeles") is the 99% limited partner of AAP and Angeles Acceptance Directives,
Inc.("AAD"), an affiliate of the General Partner, was, until April 14, 1995, the
1% general partner of AAP. On April 14, 1995, as part of a settlement of claims
between affiliates of the General Partner and Angeles, AAD resigned as general
partner of AAP and simultaneously received a .5% limited partner interest in
AAP. An affiliate of Angeles now serves as the general partner of AAP. This
working capital loan funded the Partnership's operating deficits in prior years.
Total indebtedness, which is included in the accompanying consolidated balance
sheet as a note payable to affiliate, was approximately $371,000 at June 30,
1997, and June 30, 1996, with monthly interest only payments at prime plus 0.75%
(9.25% at June 30, 1997). Principal is to be paid the earlier of i) the
availability of funds, ii) the sale of one or more properties owned by the
Partnership, or iii) November 25, 1997. The Partnership is currently in
negotiations with AAP, to extend the maturity or settle the liability at a
reduced amount. There can be no assurance that these negotiations with AAP will
be successful. Total interest expense for this loan was approximately $17,000
at June 30, 1997 and 1996. Interest of approximately $142,000 and $108,000 on
this loan was accrued at June 30, 1997 and 1996, respectively.
AMIT currently provides secondary financing on the Partnership's investment
properties. Total indebtedness was approximately $2,920,000 at June 30, 1997, of
which $1,350,000, secured by Bercado Shores, was in default at June 30, 1997.
Total interest expense related to this debt was approximately $306,000 and
$262,000 at June 30, 1997 and 1996, respectively. Accrued interest related to
this debt was approximately $1,543,000 and $984,000 at June 30, 1997 and 1996,
respectively.
MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns
1,675,113 Class B Shares of AMIT. The terms of the Class B Shares provide that
they are convertible, in whole or in part, into Class A Shares on the basis of 1
Class A Share for every 49 Class B Shares (however, in connection with the
settlement agreement described in the following paragraph, MAE GP has agreed not
to convert the Class B Shares so long as AMIT's option is outstanding). These
Class B Shares entitle MAE GP to receive 1% of the distributions of net cash
distributed by AMIT (however, in connection with the settlement agreement
described in the following paragraph, MAE GP has agreed to waive its right to
receive dividends and distributions so long as AMIT's option is outstanding).
These Class B Shares also entitle MAE GP to vote on the same basis as Class A
Shares, providing MAE GP with approximately 39% of the total voting power of
AMIT (unless and until converted to Class A Shares, in which case the percentage
of the vote controlled represented by the shares held by MAE GP would
approximate 1.3% of the vote). Between the date of acquisition of these shares
(November 24, 1992) and March 31, 1995, MAE GP declined to vote these shares.
Since that date, MAE GP voted its shares at the 1995 and 1996 annual meetings in
connection with the election of trustees and other matters. MAE GP has not
exerted and continues to decline to exert any management control over or
participate in the management of AMIT. MAE GP may choose to vote these shares
as it deems appropriate in the future. In addition, Liquidity Assistance,
L.L.C., an affiliate of Insignia Financial Group, Inc. ("Insignia"), which
provides property management and partnership administration services to the
Partnership, owns 96,800 Class A Shares of AMIT at June 30, 1997. These Class A
Shares represent approximately 2.2% of the total voting power of AMIT.
As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT an
option to acquire the Class B shares owned by it. This option can be exercised
at the end of 10 years or when all loans made by AMIT to partnerships affiliated
with MAE GP as of November 9, 1994 (which is the date of execution of a
definitive Settlement Agreement) have been paid in full, but in no event prior
to November 9, 1997. In connection with such settlement, AMIT delivered to MAE
GP cash in the sum of $250,000 at closing (which occurred April 14, 1995) as
payment for the option. If and when the option is exercised, AMIT will be
required to remit to MAE GP an additional $94,000.
Simultaneously with the execution of the option and as part of the settlement,
MAE GP executed an irrevocable proxy in favor of AMIT, the result of which is
that MAE GP is permitted to vote the Class B Shares on all matters except those
involving transactions between AMIT and MAE GP affiliated borrowers or the
election of any MAE GP affiliate as an officer or trustee of AMIT. On those
matters, MAE GP is obligated to deliver to the AMIT trustees, in their capacity
as trustees of AMIT, proxies with regard to the Class B Shares instructing such
trustees to vote said Class B Shares in accordance with the vote of the majority
of the Class A Shares voting to be determined without consideration of the votes
of "Excess Class A Shares" (as defined in Section 6.13 of the Declaration of
Trust of AMIT).
On April 3, 1997, Insignia and AMIT entered into a non-binding agreement in
principle contemplating, among other things, a business combination of AMIT and
Insignia Properties Trust, an entity owned 98% by Insignia and its affiliates
("IPT"). On July 18, 1997, IPT, Insignia and MAE G.P. entered into a definitive
merger agreement pursuant to which (subject to shareholder approval and certain
other conditions, including the receipt by AMIT of a fairness opinion from its
investment bankers) AMIT would be merged with and into IPT, with each Class A
Share and Class B Share being converted into 1.625 and 0.0332 common shares of
IPT, respectively. The foregoing exchange ratios are subject to adjustment to
account for dividends paid by AMIT from January 1, 1997, through the closing
date of the merger. It is anticipated that Insignia (and its affiliates) and
MAE GP (and its affiliates) would own approximately 55% and 2.4%, respectively,
of post-merger IPT when this transaction is consummated.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of two apartment complexes. The
following table sets forth the average occupancy of the properties for the six
months ended June 30, 1997 and 1996:
Average Occupancy
1997 1996
Bercado Shores Apartments
Mishawka, Indiana 90% 93%
Brittany Point Apartments
Huntsville, Alabama 94% 86%
Occupancy at Brittany Point increased due to a stronger job market in the
Huntsville area and due to major rehabilitation projects at the property from
funds set aside in the 1996 refinancing.
The Partnership realized a net loss of approximately $185,000 and approximately
$400,000 for the three and six month periods ended June 30, 1997, compared to a
net loss of approximately $309,000 and approximately $497,000 for the three and
six month periods ended June 30, 1996. For the three and six month periods
ended June 30, 1997, net loss decreased primarily as a result of an increase in
rental income and decreases in general and administrative expense as discussed
below.
Rental income increased as a result of rental rate increases at both of the
Partnership's properties and an increase in occupancy at Brittany Point. The
impact of these rental rate increases was partially negated by the occupancy
decrease at Bercado Shores. General and administrative expense decreased due to
decreases in reimbursements for services of affiliates and audit fees. These
items are partially offset by increases in maintenance and depreciation
expenses. Maintenance expense increased due to increased gutter and swimming
pool repairs at Brittany Point. Depreciation expense increased due to an
extensive rehabilitation project completed in 1996 which resulted in increased
fixed asset additions at Brittany Point.
Included in maintenance expense is approximately $56,000 of major repairs and
maintenance comprised primarily of gutter and swimming pool repairs for the six
months ended June 30, 1997. For the six months ended June 30, 1996,
approximately $30,000 of major repairs and maintenance comprised primarily of
major landscaping, swimming pool repairs and exterior building improvements are
included in maintenance expense.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.
The Partnership's primary source of cash has been from property operations with
such cash being utilized for the paydown of existing debt on the investment
properties, capital expenditures and daily operational expenses. It is the
Partnership's policy to commit capital resources as available for the continuing
improvement and maintenance of its properties.
The Partnership held unrestricted cash of approximately $290,000 at June 30,
1997, compared to unrestricted cash of approximately $165,000 at June 30, 1996.
Net cash provided by operating activities increased for the six months ended
June 30, 1997, primarily due to a decrease in escrows for taxes and an increase
in accrued interest. Net cash used in investing activities decreased primarily
due to a decrease in property improvements and replacements. Net cash used in
financing activities increased due to the absence of refinancing activities in
the six months ended June 30, 1997.
No distributions were made by the Partnership during the first six months of
1997 or 1996.
Since 1992, the nominal cash generated by the properties has been insufficient
to pay the capital expenditures and scheduled debt service. The Partnership has
incurred recurring operating losses and is in default on a portion of its
mortgage notes payable. The Partnership's first mortgage in the amount of
approximately $4,060,000 secured by Bercado Shores Apartments was previously in
default due to nonpayment of 1993 property taxes. The property is now current
on payment of property taxes and the first mortgage is no longer in default.
However, the second mortgage to AMIT in the amount of $1,350,000, secured by the
Bercado Shores Apartments, has been in default since March 1993 due to
nonpayment of interest. Since the default in March of 1993, the lender has not
indicated its intent to pursue its available remedies under the mortgage
agreement, however, the Partnership's properties remain subject to foreclosure
under the terms of the second mortgage agreement. The General Partner
anticipates sufficient cash flow to be generated by the property over the next
twelve months to meet all non-debt-related operating expenses. The Partnership
has initiated discussions with AMIT and hopes to negotiate a work-out, however,
there can be no assurance that the Partnership's negotiations will prove
successful.
The first mortgage indebtedness of approximately $9,368,000 secured by Brittany
Point matured in June 1995. This first mortgage was refinanced on January 18,
1996, with the existing lender for a principal amount of $9,800,000, a stated
interest rate of 7.875% and a maturity date of February 1, 2001. To facilitate
the refinancing, the property was transferred to a lower-tier partnership known
as Brittany Point AP VIII, L.P. in which the Partnership effectively owns a
99.99% limited partner interest. Although legal ownership of this asset was
transferred to a new entity, the Partnership retained control and substantially
all economic benefits of the property. Also, a workout proposal with AMIT on
the second mortgage of Brittany Point was finalized during the first quarter of
1996 so that the second mortgage is no longer in default. The workout proposal
with AMIT provides for the accrual of interest through February 28, 1997, after
which cash flow payments will be made through June 30, 1997. Commencing July 1,
1997, interest payments will be made at the accrual rate of interest through the
maturity of the note on December 31, 2000.
In November 1992, Angeles Acceptance Pool, L.P. ("AAP"), a Delaware limited
partnership which now controls the working capital loan previously provided by
Angeles Capital Investment, Inc. ("ACII"), was organized. Angeles Corporation
("Angeles") is the 99% limited partner of AAP and Angeles Acceptance Directives,
Inc.("AAD"), an affiliate of the General Partner, was, until April 14, 1995, the
1% general partner of AAP. On April 14, 1995, as part of a settlement of claims
between affiliates of the General Partner and Angeles, AAD resigned as general
partner of AAP and simultaneously received a .5% limited partner interest in
AAP. An affiliate of Angeles now serves as the general partner of AAP. This
working capital loan funded the Partnership's operating deficits in prior years.
Total indebtedness, which is included as a note payable, was approximately
$371,000 at June 30, 1997, and June 30, 1996, with monthly interest only
payments at prime plus 0.75% (9.25% for June 30, 1997). Principal is to be paid
the earlier of i) the availability of funds, ii) the sale of one or more
properties owned by the Partnership, or iii) November 25, 1997. The Partnership
is currently in negotiations with AAP to extend the maturity or settle the
liability at a reduced amount. There can be no assurance that these
negotiations with AAP will be successful. Total interest expense for this loan
was approximately $17,000 at June 30, 1997 and 1996. Interest of $142,000 and
$108,000 on this loan was accrued at June 30, 1997 and 1996, respectively.
AMIT currently provides secondary financing on the Partnership's investment
properties. Total indebtedness was approximately $2,920,000 at June 30, 1997, of
which $1,350,000, secured by Bercado Shores, was in default at June 30, 1997.
Total interest expense related to this debt was approximately $306,000 and
$262,000 at June 30, 1997 and 1996, respectively. Accrued interest related to
this debt was approximately $1,543,000 and $984,000 at June 30, 1997 and 1996,
respectively.
MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns
1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these Class
B Shares, in whole or in part, into Class A Shares on the basis of 1 Class A
Share for every 49 Class B Shares (however, in connection with the settlement
agreement described in the following paragraph, MAE GP has agreed not to convert
the Class B Shares so long as AMIT's option is outstanding). These Class B
Shares entitle MAE GP to receive 1% of the distributions of net cash distributed
by AMIT (however, in connection with the settlement agreement described in the
following paragraph, MAE GP has agreed to waive its right to receive dividends
and distributions so long as AMIT's option is outstanding). These Class B
Shares also entitle MAE GP to vote on the same basis as Class A Shares,
providing MAE GP with approximately 39% of the total voting power of AMIT
(unless and until converted to Class A Shares, in which case the percentage of
the vote controlled represented by the shares held by MAE GP would approximate
1.3% of the vote). Between the date of acquisition of these shares (November
24, 1992) and March 31, 1995, MAE GP declined to vote these shares. Since that
date, MAE GP voted its shares at the 1995 and 1996 annual meetings in connection
with the election of trustees and other matters. MAE GP has not exerted and
continues to decline to exert any management control over or participate in the
management of AMIT. MAE GP may choose to vote these shares as it deems
appropriate in the future. In addition, Liquidity Assistance, LLC, an affiliate
of Insignia Financial Group, Inc. ("Insignia"), which provides property
management and partnership administration services to the Partnership, owns
96,800 Class A Shares of AMIT at June 30, 1997. These Class A Shares represent
approximately 2.2% of the voting power of AMIT.
As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT an
option to acquire the Class B shares owned by it. This option can be exercised
at the end of 10 years or when all loans made by AMIT to partnerships affiliated
with MAE GP as of November 9, 1994, (which is the date of execution of a
definitive Settlement Agreement) have been paid in full, but in no event prior
to November 9, 1997. In connection with such settlement, AMIT delivered to MAE
GP cash in the sum of $250,000 at closing (which occurred April 14, 1995) as
payment for the option. If and when the option is exercised, AMIT will be
required to remit to MAE GP an additional $94,000.
Simultaneously with the execution of the option and as part of the settlement,
MAE GP executed an irrevocable proxy in favor of AMIT, the result of which is
that MAE GP is permitted to vote the Class B Shares on all matters except those
involving transactions between AMIT and MAE GP affiliated borrowers or the
election of any MAE GP affiliate as an officer or trustee of AMIT. On those
matters, MAE GP is obligated to deliver to the AMIT trustees, in their capacity
as trustees of AMIT, proxies with regard to the Class B Shares instructing such
trustees to vote said Class B Shares in accordance with the vote of the majority
of the Class A Shares voting to be determined without consideration of the votes
of "Excess Class A Shares" (as defined in Section 6.13 of the Declaration of
Trust of AMIT).
On April 3, 1997, Insignia and AMIT entered into a non-binding agreement in
principle contemplating, among other things, a business combination of AMIT and
Insignia Properties Trust, an entity owned 98% by Insignia and its affiliates
("IPT"). On July 18, 1997, IPT, Insignia and MAE GP entered into a definitive
merger agreement pursuant to which (subject to shareholder approval and certain
other conditions, including the receipt by AMIT of a fairness opinion from its
investment bankers) AMIT would be merged with and into IPT, with each Class A
Share and Class B Share being converted into 1.625 and 0.0332 common shares of
IPT, respectively. The foregoing exchange ratios are subject to adjustment to
account for dividends paid by AMIT from January 1, 1997, through the closing
date of the merger. It is anticipated that Insignia (and its affiliates) and
MAE GP (and its affiliates) would own approximately 55% and 2.4%, respectively,
of post-merger IPT when this transaction is consummated.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
b) Reports on Form 8-K:
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ANGELES PARTNERS VIII LIMITED PARTNERSHIP
By: Angeles Realty Corporation
General Partner
By: /s/Carroll D. Vinson
Carroll D. Vinson
President
By: /s/Robert D. Long, Jr.
Robert D. Long, Jr.
Vice President/CAO
Date: August 6, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners VIII 1997 Second Quarter 10-QSB and is qualified in its entirety by
reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000276779
<NAME> ANGELES PARTNERS VIII
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 290
<SECURITIES> 0
<RECEIVABLES> 10
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 15,062
<DEPRECIATION> (10,093)
<TOTAL-ASSETS> 5,674
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 16,713
0
0
<COMMON> 0
<OTHER-SE> (13,971)
<TOTAL-LIABILITY-AND-EQUITY> 5,674
<SALES> 0
<TOTAL-REVENUES> 1,910
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,310
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 913
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (400)
<EPS-PRIMARY> (33.40)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
