FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
(As last amended by 34-32231, eff. 6/3/93.)
U.S. 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 September 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 0-11970
PRUDENTIAL-BACHE/VMS REALTY ASSOCIATES L.P. I
(Exact name of small business issuer as specified in its charter)
Delaware 36-3240083
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
8700 West Bryn Mawr
Chicago, Illinois 60631
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (312) 399-8700
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) PRUDENTIAL-BACHE/VMS REALTY ASSOCIATES L.P. I
STATEMENT OF NET ASSETS IN LIQUIDATION
(in thousands)
(Unaudited)
September 30, 1996
Assets
Cash $ 93
Receivable from escrow 75
168
Liabilities
Advances due to affiliates of the Managing
General Partner 156
Estimated costs during the period
of liquidation 12
Net assets in liquidation $ 0
See Accompanying Notes to Financial Statements
b) PRUDENTIAL-BACHE/VMS REALTY ASSOCIATES L.P. I
STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
(in thousands)
(Unaudited)
September 30, 1996
Net assets in liquidation $ 0
at December 31, 1995
Changes in net assets in liquidation
attributable to:
Decrease in unrestricted cash (55)
Increase in receivable from escrow 75
Decrease in restricted-tenant security deposits (87)
Decrease in accounts receivable (6)
Decrease in tax escrows (95)
Decrease in restricted escrows (168)
Decrease in investment properties (8,660)
Decrease in accounts payable 25
Decrease in advances due to affiliates of the Managing
General Partner 1,624
Decrease in other liabilities 437
Decrease in mortgage notes payable 6,590
Decrease in estimated costs during the
period of liquidation 320
Net assets in liquidation at
September 30, 1996 $ 0
See Accompanying Notes to Financial Statements
c) PRUDENTIAL-BACHE/VMS REALTY ASSOCIATES L.P. I
STATEMENTS OF OPERATION
(in thousands, except unit data)
(Unaudited)
(Going Concern Basis)
Three Months Ended Nine Months Ended
September 30, 1995 September 30, 1995
Revenues:
Rental income $ 469 $ 1,392
Other income 26 78
Total revenues 495 1,470
Expenses:
Operating 160 509
General and administrative 76 198
Maintenance 121 244
Depreciation 131 375
Interest 435 1,299
Property taxes 50 155
Total expenses 973 2,780
Net loss before extraordinary item $ (478) $(1,310)
Extraordinary item-gain on sale
of land 66 66
Net Loss $ (412) $(1,244)
Net loss allocated to general
partners (2%) $ (6) $ (23)
Net loss allocated to limited
partners (98%) (406) (1,221)
$ (412) $(1,244)
Net loss per limited
partnership unit:
Net loss before extraordinary item $(18.73) $(51.34)
Extraordinary gain from sale of land 2.51 2.51
Net loss $(16.22) $(48.83)
See Accompanying Notes to Financial Statements
d) PRUDENTIAL-BACHE/VMS REALTY ASSOCIATES L.P. I
STATEMENT OF CASH FLOWS
(in thousands)
(Unaudited)
(Going Concern Basis)
Nine Months Ended
September 30, 1995
Cash flows from operating activities:
Net loss $(1,244)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 375
Amortization 35
Gain on sale of land (66)
Change in accounts:
Restricted cash 14
Accounts receivable 5
Tax escrow (62)
Other assets 6
Accounts payable and other accrued expenses 668
Accrued interest 262
Tenant security deposit liabilities (3)
Net cash used in operating activities (10)
Cash flows from investing activities:
Property improvements and replacements (202)
Deposits to restricted escrows (6)
Receipts from restricted escrows 133
Proceeds from sale of land 150
Net cash provided by investing activities 75
Cash flows from financing activities:
Principal payments on mortgage notes payable (29)
Net cash used in financing activities (29)
Net increase in cash 36
Cash at beginning of period 259
Cash at end of period $ 295
Supplemental disclosure of cash flow information:
Cash paid for interest $ 488
See Accompanying Notes to Financial Statements
e) PRUDENTIAL-BACHE/VMS REALTY ASSOCIATES L.P. I
Notes to Financial Statements
(Unaudited)
September 30, 1996
NOTE A - BASIS OF PRESENTATION
Effective December 31, 1995, the Registrant determined it was in the partners'
best interest to liquidate the Partnership upon the imminent disposal of the
investment properties and settlement of remaining liabilities expected to occur
in 1996. Of the Partnership's two remaining properties at December 31, 1995,
Woodlawn House was sold February 1, 1996, and Meadows at Kendale Lakes was sold
April 15, 1996.
The decision to liquidate the Partnership resulted in the change in the basis of
accounting for its financial statements at December 31, 1995, from the going
concern basis of accounting to the liquidation basis of accounting.
Consequently, assets have been valued at estimated net realizable value and
liabilities are presented at their estimated settlement amounts, including
estimated costs associated with carrying out the liquidation. The valuation of
certain assets and liabilities necessarily requires estimates and assumptions.
The actual realization of assets and settlement of liabilities could be higher
or lower than amounts indicated and is based upon the Managing General Partner's
estimates as of the date of the most current financial statements.
The statement of net assets in liquidation as of September 30, 1996, includes
approximately $12,000 of accrued costs that the Partnership estimates will be
incurred during the period of liquidation, based on the assumption that the
liquidation process will be completed during the fourth quarter of 1996. These
costs include administrative expenses and termination costs related to
terminating the Partnership. Because the ultimate realization of assets and the
settlement of liabilities is based on estimates, the liquidation period may be
extended beyond the projected period.
The accompanying unaudited financial statements at September 30, 1996, 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 Managing General Partner, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation on the liquidation basis have been included. For further
information, refer to the financial statements and footnotes thereto included in
the Partnership's annual report on Form 10-KSB for the fiscal year ended
December 31, 1995.
NOTE B - LEGAL PROCEEDINGS
Certain affiliates of the Managing General Partner and certain officers and
directors of such affiliates are parties to certain pending legal proceedings.
The adverse outcome of any one or more legal proceedings against an affiliate of
the Managing General Partner which provides financial support or services to the
Partnership could have a materially adverse effect on the present and future
operations of the Partnership. However, the inclusion of this discussion is not
intended as a representation by the Partnership that any particular proceeding
is material. The ultimate outcome of the litigation cannot presently be
determined. Accordingly, no provision for any liability that may result has
been made in the unaudited financial statements.
NOTE C - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
The Partnership has no employees and is dependent on the Managing General
Partner or its affiliates for the management and administration of all
partnership activities. The Managing General Partner or its affiliates may be
reimbursed for direct expenses relating to the Partnership's administration and
other costs paid on behalf of the Partnership. The Managing General Partner
received $11,000 and $3,000 for the periods ended September 30, 1996 and 1995,
respectively, as reimbursement for such out-of-pocket expenses.
The Partnership had advances of approximately $9,858,000 payable to affiliates
of the Managing General Partner at September 30, 1996. During 1994, the
Managing General Partner and its affiliates assigned a portion of the advances
to an affiliate of Insignia Financial Group, Inc. ("Insignia"). The liability
for advances has been adjusted to its estimated settlement amount of $156,000 in
the accompanying financial statements.
The Partnership has engaged affiliates of Insignia to provide day-to-day
management of the Partnership's properties under an agreement which provides for
fees equal to 5% of revenues on each property. An affiliate of Insignia also
provided partnership administration and management services for the Partnership
during the nine month period ended September 30, 1996 and 1995. Reimbursements
for direct expenses relating to these services totaled approximately $38,000 and
$67,000 for the periods ended September 30, 1996 and 1995, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
At December 31, 1995, the Partnership adopted the liquidation basis of
accounting. Of the Partnership's remaining properties at December 31, 1996,
Woodlawn House was sold February 1, 1996, and Meadows at Kendale Lakes was sold
April 15, 1996. Accordingly, the Partnership will be liquidated upon settlement
of the remaining liabilities during 1996.
The imminent disposition of the Partnership's properties resulted in the change
in the basis of accounting for its financial statements at December 31, 1995,
from the going concern basis of accounting to the liquidation basis of
accounting. Consequently, assets have been valued at estimated net realizable
value and liabilities are presented at their estimated settlement amounts,
including estimated costs associated with carrying out the liquidation. The
valuation of certain assets and liabilities necessarily requires estimates and
assumptions. The actual realization of assets and settlement of liabilities
could be higher or lower than amounts indicated and is based upon estimates as
of the date of the most current financial statements.
Liquidity and Capital Resources
The statement of net assets in liquidation as of September 30, 1996, includes
approximately $1,000 of accrued costs that the Partnership estimates will be
incurred during the period of liquidation based on the assumption that the
liquidation process will be completed during the fourth quarter of 1996. These
costs include administrative expenses and termination costs related to
terminating the partnership. Because the ultimate realization of assets and
settlement of liabilities is based on estimates, the liquidation period may be
extended beyond the projected period. The Managing General Partner expects that
no assets will be available for distribution to the partners upon settlement of
the Partnership's remaining liabilities.
DEVELOPMENTS - VMS REALTY PARTNERS AND AFFILIATES
There have been no material developments or changes from the Recent Developments
- - VMS Realty Partners and Affiliates disclosed in "Part I, Item 1" of the
Partnership's report on Form 10-KSB for the year ended December 31, 1995.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There have been no new material developments or changes from "Part I, Item 3" of
the Partnership's report on the Form 10-KSB for the year ended December 31,
1995.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Partnership did not submit any matter to a vote of its holders of Limited
Partnership Interests during the third quarter of 1996.
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 filed during the quarter ended September 30, 1996.
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.
PRUDENTIAL-BACHE/VMS REALTY ASSOCIATES L.P. I
(Registrant)
By: VMS Realty Associates
Managing General Partner
By: JAS Realty Corporation
Date: By: /s/Joel A. Stone
Joel A. Stone
President
Date: November 12, 1996 By: /s/Thomas A. Gatti
Thomas A. Gatti
Senior Vice President and
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Prudential-Bache/VMS Realty Associates L.P. I 1996 Third Quarter 10-QSB and is
qualified in its entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000350558
<NAME> PRUDENTIAL BACHE VMS REALTY ASSOCIATES L.P. I
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 93
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
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<FN>
<F1>Registrant has an unclassified balance sheet.
</FN>
</TABLE>
