<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (Fee Required)
For the Year Ended December 31, 1996
[_] Transition Report Pursuant to Section 13 of 15(d) of the Securities
Exchange Act of 1934 (No Fee Required)
Commission File Number 0-9745
DE ANZA PROPERTIES - XI, LTD. LIQUIDATING TRUST, Formerly Known as
DE ANZA PROPERTIES - XI, LTD. (Former Registrant)
(Exact Name of Registrant as Specified in Its Charter)
California 95-6975740
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
9171 Wilshire Boulevard, Suite 627 90210
Beverly Hills, California (Zip Code)
(Address of Principal Executive Offices)
(310) 550-1111 (Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12 (b) of the Act:
None.
Securities registered pursuant to Section 12(g) of the Act:
None
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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
State the aggregate market value of the voting stock held by non-affiliates
of the Trust.
$1,617,000 Beneficial interest in trust, not transferable (See Item 5 Herein)
DOCUMENTS INCORPORATED BY REFERENCE.
Portions of the Proxy Statement, dated July 7, 1994 and the report on Form
15 filed with the Securities and Exchange Commission on January 3, 1995 of
former registrant are incorporated by reference in Parts I, II, III and IV
hereof.
Page 1 of 24 pages contained herein. Exhibit Index located on page 10 herein.
<PAGE>
PART I.
ITEM 1. BUSINESS.
--------
De Anza Properties - XI, Ltd. (the "Partnership"), the former
registrant, ceased operations and dissolved on August 18, 1994 and subsequently
terminated on December 28, 1994 upon filing Form LP-4. De Anza Properties - XI,
Ltd. Liquidating Trust (the "Trust") was formed in order to wind up the
Partnership's affairs.
The Partnership sold its two remaining properties on August 18, 1994
in a simultaneous transaction in which properties owned by eight other
affiliated limited partnerships controlled by Herbert M. Gelfand or his
affiliates were sold or transferred, along with the sale of De Anza Group, Inc.,
the management company owned by Mr. Gelfand, to affiliates of Manufactured Home
Communities, Inc. ("MHC").
The Trust was established pursuant to the terms of a trust agreement
dated August 10, 1994 with Mr. Herbert M. Gelfand (or his successor appointed in
accordance with the terms of the trust agreement) as sole trustee of the Trust
(the "Trustee"). The sole beneficiaries of the Trust are the former Limited
Partners of the Partnership (the "Beneficiaries"). The Trust will hold all of
the remaining assets of the Partnership, subject to any remaining liabilities of
the Partnership, whether known or unknown. The Trust assets are not commingled
with the assets of any other partnership or liquidating trust established for
any other partnership.
The trust agreement contains customary terms and conditions and has
the following characteristics:
(i) Each Limited Partner became a beneficiary of the Trust
to the extent of their former pro rata class ownership interest in
the Partnership.
(ii) The Trust's activities will consist of: (a) satisfying
any liabilities or obligations of the Partnership which were not paid
or otherwise discharged by the Partnership; (b) making liquidating
distributions to the beneficiaries as funds are released from the
Reserves (as defined in Item 7(1) and (2) Liquidity and Capital
Resources which is incorporated herein by reference); (c) investing
its liquid assets in demand and short term time deposits in banks or
savings institutions or temporary investments such as short-term
certificates of deposit or Treasury bills (excluding derivative
securities); and (d) taking such other action as is necessary to
conserve and protect the assets of the Trust and provide for the
orderly liquidation of the assets transferred to the Trust. Since the
former Limited Partners are the sole beneficiaries of the Trust, they
will bear the risk of the investment of the Trust assets.
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<PAGE>
(iii) Beneficial interests in the Trust will not be
transferable except by will, intestate succession, or operation of
law and no certificates representing such beneficial interests have
been issued.
(iv) The Trustee will issue annual reports to the
beneficiaries showing the assets and liabilities of the Trust at the
end of each calendar year and the receipts and disbursements of the
Trustee for the period. The annual report will also describe changes
to the assets of the Trust during the period and actions taken by the
Trustee during the period. Such reports will be audited by the
Trust's outside certified public accountants. The Trustee may also
issue interim reports to the Beneficiaries. These interim reports
will be issued whenever, in the opinion of the Trustee, a significant
event relating to the assets of the Trust has occurred.
(v) At the reasonable discretion of the Trustee, the Trust
will disburse its net earnings annually.
(vi) The Trust will terminate at the earlier of the
distribution of all of the remaining assets, if any, to the
beneficiaries or three years from the date of formation of the Trust,
but may be extended to a later date if liabilities remain unresolved
at the end of the three-year term.
The sole beneficiaries of the Trust are the former Limited Partners
of the Partnership. The Trust holds all of the remaining assets of the
Partnership, subject to any remaining liabilities of the Partnership, whether
known or unknown at the time of its termination. These assets initially
consisted of the MHC Reserve, the Partnership Expense Reserve, and the right to
receive any funds remaining in the Independent Committee Reserve trust and the
General Reserve trust. Each Reserve is defined in Item 7(1) and (2) Liquidity
and Capital Resources which is incorporated herein by reference. Upon
termination of the separate trust arrangements, any remaining assets will be
distributed, in one or more installments, to the Trust. The Trust will then
distribute the remaining assets from these reserves to the Beneficiaries (the
former Limited Partners of the Partnership, pro rata in accordance with their
former class ownership interest in the Partnership). Upon termination of the
Trust, any remaining assets will be distributed in one or more installments to
the Beneficiaries.
ITEM 2. PROPERTIES.
----------
The Trust owns no physical properties.
ITEM 3. LEGAL PROCEEDINGS.
-----------------
None.
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<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
---------------------------------------------------
No matter was submitted during the quarter ended December 31, 1996.
PART II.
ITEM 5. MARKET FOR THE TRUST'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
--------------------------------------------------------------------
(a) Market Information.
------------------
Under the terms of Trust the Beneficial Interests are not
transferable, therefore there is no public market for the Beneficiary Interests
in the Trust and it is not anticipated that a public market for them will
develop. Accordingly, accurate information as to the market value of an Interest
at any given date is not available. The estimated aggregate market price shown
on the cover page of this report is simply the original capital contributed by
the Partnership and should not be relied upon as indicative of any bid or ask
quotations or transactions in the Trust.
(b) Holders.
-------
As of December 31, 1996, the approximate number of Beneficiaries is
2,020.
(c) Dividends.
---------
The Trust does not pay dividends, but will distribute Trust assets in
one or more installments as the resolution of contingencies allow as determined
by the Trustee. In 1996 the Trust distributed $149,535 to the Beneficiaries from
the Independent Committee Reserve and from additional condemnation proceeds from
an appeal of Bay Lake Estate's 1994 valuation.
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<PAGE>
ITEM 6. SELECTED FINANCIAL DATA.
-----------------------
The following table sets forth in tabular form a summary of selected
financial data for the Trust for the years ended December 31, 1996 and 1995 and
for the period from August 10, 1994 (Inception) through December 31, 1994:
<TABLE>
<CAPTION>
1996 1995 1994
--------- ---------- ----------
<S> <C> <C> <C>
Operating revenues: $ 50,563 $ 51,023 $ 11,886
Gain on sale of property and
equipment: 149,535 159,000 -0-
Net income (loss) from continuing
operations: 150,639 87,638 (64,250)
Net income (loss) from continuing
operations per 1% Beneficiary
Interest: 1,506.39 876.38 (642.50)
Total assets: 945,189 1,053,043 1,604,271
Long-term obligations: -0- -0- -0-
Cash distributions per 1%
Beneficiary Interest: 1,495.35 4,500.00 -0-
</TABLE>
The above selected financial data should be read in conjunction with the
financial statements and the related notes appearing elsewhere in this annual
report.
-5-
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS.
---------------------
(1) and (2) Liquidity and Capital Resources.
-------------------------------
Four separate reserves (the "Reserves") were established for the
benefit of the former Limited Partners of the Partnership in connection with the
formation of the Trust.
The MHC Reserve consisted of cash in the amount of $159,000. The MHC
Reserve was created on the date the properties owned by the Partnership were
sold and was maintained by the Trust in a separate account, not to be commingled
with any other of the Trust funds. The MHC Reserve was released in full in 1995
and distributed to the Beneficiaries.
The General Reserve is maintained in a separate trust account,
pursuant to the terms of a trust agreement between the Trust, as the
beneficiary, and Mr. Gelfand, as trustee, with an initial all cash fund in the
amount of $488,196. Pursuant to the terms of a contribution agreement entered
into among all of the partnerships and/or liquidating trusts involved in the
sale or transfer of assets which closed in August 1994, funds in the General
Reserve may be used to discharge or satisfy the Trust's pro rata portion of any
contingent liabilities of any of the liquidating trusts or the partnerships, and
to discharge or satisfy any liabilities of Mr. Gelfand and his affiliates. Such
liabilities may include any legal expenses incurred by the liquidating trusts,
the partnerships, Mr. Gelfand and his affiliates personally in the defense or
resolution of any claim or action arising out of the MHC transaction, including
claims arising out of the indemnification obligations of the parties in
connection with the MHC transaction. All amounts in the General Reserve are
invested in interest bearing accounts or other short term investments (excluding
derivatives) reportable for federal income tax purposes to the Trust's federal
tax identification number. In August 1997, assuming no claims are threatened or
pending, all funds remaining in the General Reserve will be released to the
Trust, which will distribute these funds to the Beneficiaries of the Trust.
The amount of the Independent Committee Reserve trust of which the
Trust is the beneficiary was initially $218,879. The funds held in the
Independent Committee Reserve are invested in an interest bearing account (but
not in derivative securities) pursuant to the terms of the Independent Committee
Trust Agreement, and reported for federal income tax purposes to the Trust's
federal tax identification number. Pursuant to the terms of a contribution
agreement among all of the partnerships/liquidating trusts, each
partnership/liquidating trust (including the Trust) will contribute a pro rata
portion of any claim for indemnification made by the Independent Committee
regardless of which specific partnership or partnerships, if less than all, a
claim relates to. In August 1996, $109,439 of the Reserve was released and
assuming no claims against the Independent Committee Reserve have been made or
threatened, the remaining $109,440, will be released in August 1997. The
Independent Committee may elect to extend the term of the Independent Committee
Reserve for an additional year. At the time of the next release of funds from
the Independent Committee Reserve to the Trust, the Trustee will make
distributions to the Beneficiaries.
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<PAGE>
The Partnership Expense Reserve was established and retained by the
Trust. The initial amount of this Reserve was approximately $751,000 net of
liabilities and receivables. During 1995, $291,000 was distributed to the
Beneficiaries. Any funds remaining in this Reserve, after payment of
administrative expenses, contingent liabilities (known or unknown) and costs of
liquidating and dissolving, will be distributed by the Trustee to the
Beneficiaries.
(3) Results of Operations.
---------------------
Since the inception of the Trust on August 10, 1994 and its
subsequent receipt of Partnership assets, the Trust has received or has been
allocated interest and dividend income of $48,490, $47,872 and $11,554 in 1996,
1995 and 1994, respectively, and received released reserves of $109,440 in 1996
and $159,000 in 1995. Additionally, in 1996 the Trust received $40,095 in
condemnation proceeds from an appeal of Bay Lake Estate's 1994 valuation.
Administrative expenses totaled $47,836, $58,012 and $40,266 in 1996, 1995 and
1994, respectively. Reprorations of rents, utility income and expenses including
write-offs of uncollectable rents subsequent to closing of the sale of
properties owned by the Partnership resulted in a net expense of $64,373 in 1995
and $35,870 in 1994.
Other than as described above, there are no known trends or
uncertainties which have had or can be reasonably expected to have a material
effect on continuing operations.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
-------------------------------------------
See Index to Financial Statements set forth in Item 14 of this Annual
Report on Form 10-K. The material contained in such Financial Statements and
Notes is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
---------------------------------------------------------------
FINANCIAL DISCLOSURE.
--------------------
None.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP.
---------------------------------------------------
The Trust has no executive officers or directors. The Trustee is Mr.
Herbert M. Gelfand. Herbert M. Gelfand currently serves as a Trustee of 16
affiliated trusts and is the Operating General Partner of four affiliated
partnerships, the first of which was formed in 1969. Mr. Gelfand was also the
founder,
-7-
<PAGE>
and together with his wife, Beverly J. Gelfand, were the principal shareholders
of De Anza Group, Inc., the former Operating General Partner of the Partnership.
Mr. Gelfand served as its Chairman of the Board of Directors until its sale.
From 1986 to 1990, Mr. Gelfand was also its Chief Executive Officer. In
addition, Mr. Gelfand is the sole shareholder and Chairman of the Board of
Directors of De Anza Corporation which currently serves as the Operating General
Partner of two real estate partnerships and is the liquidating agent of three
other partnerships. He is a member of the Bar of the State of California and was
engaged in the private practice of law from 1956 through 1977. From 1970 until
1975, Mr. Gelfand was a partner in the predecessor to the firm of Benjamin and
Susman, a Law Corporation (and thereafter was counsel to that firm until 1977),
which predecessor law firm performed legal services for all but one of the
affiliated partnerships. Mr. Gelfand is married to Beverly J. Gelfand, who
served as a director of De Anza Group, Inc. until its sale, and is the father of
Michael D. Gelfand, the former Director, President and Chief Financial Officer
of De Anza Group, Inc., the Director, President and Chief Financial Officer of
De Anza Corporation and the sole shareholder, Chairman of the Board, President
and Chief Financial Officer of Terra Vista Management, Inc.
Based upon a review of Forms 3, 4 and 5 and amendments thereto
furnished to the Trust, no person failed to timely file a report required by
Section 16(a) of the Securities Exchange Act of 1934.
ITEM 11. EXECUTIVE COMPENSATION.
----------------------
The Trust does not have directors, a chief executive officer or any
other executive officers. In 1996 the Trustee received approximately $30 in
distributions for his direct pro rata share as a Beneficiary of the Trust and
indirectly through his spouse's Beneficiary Interest. No compensation was paid
by the Trust to the Trustee.
Information contained in Item 13 of this Annual Report on Form 10-K
is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
---------------------------------------------------
MANAGEMENT.
----------
(a) Security Ownership of Certain Beneficial Owners.
-----------------------------------------------
The Trust has no knowledge of any individual who has beneficial
ownership of more than five percent of any class of the Trust's voting interest.
-8-
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
----------------------------------------------
For the year ended December 31, 1996, one or more affiliated or
related parties of the Trustee was reimbursed $27,483 for the cost of goods and
services provided that were necessary for the administration of the Trust and
wind-up of the Partnership's affairs. See Item 8, Note 4 to the Financial
Statements for discussion of the affiliations with the Trust and actual
transaction amounts which is incorporated herein by reference.
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
---------------------------------------------------------------
(a) 1. Index to Financial Statements for the years ended December 31,
1996 and 1995 that are filed as part of this report:
PAGE
----
Independent Auditor's Report ........................... 15
Balance Sheets, December 31, 1996 and 1995 ............. 16
Statements of Operations for the years ended
December 31, 1996 and 1995 and for the period
August 10, 1994 through December 31, 1994 .............. 17
Statements of Changes in Beneficiaries' Capital for
the years ended December 31, 1996 and 1995 and for
the period August 10, 1994 through December 31, 1994 ... 18
Statements of Cash Flows for the years ended
December 31, 1996 and 1995 and for the period
August 10, 1994 through December 31, 1994 .............. 18
Notes to Financial Statements .......................... 20
2. All Schedules have been omitted since they are not required, not
applicable or the information is included in the Financial Statements or notes
thereto.
3. The following index sets forth the exhibits required to be filed
by Item 601 of Regulation S-K:
-9-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE
- ----------- ----
<C> <S> <C>
2.1 De Anza Properties-XI, Ltd. Liquidating Trust Agreement dated August
10, 1994 between the Partnership and Herbert M. Gelfand, trustee. (See
Exhibit 2.1 in the Trust's Annual Report on Form 10-K for the year
ended December 31, 1994, incorporated herein by reference).
2.2 Assignment and Assumption Agreement dated August 18, 1994 between the
Partnership and the Trust. (See Exhibit 2.2 in the Trust's Annual
Report on Form 10-K for the year ended December 31, 1994 incorporated
herein by reference.)
2.3 General Reserve Trust Agreement dated August 1, 1994 between the
Partnership, the Herbert M. and Beverly J. Gelfand Family Trust, and
Herbert M. Gelfand as trustee. (See Exhibit 2.3 in the Trust's Annual
Report on Form 10-K for the year ended December 31, 1994 incorporated
herein by reference.)
2.4 Independent Committee Trust Agreement dated August 1, 1994 between the
Partnership and Citicorp Trust N.A. as trustee. (See Exhibit 2.4 in
the Trust's Annual Report on Form 10-K for the year ended December 31,
1994 incorporated herein by reference.)
2.5 General Reserve Contribution Agreement dated August 1, 1994 between
the Partnership, affiliated partnerships, the Herbert M. and Beverly
J. Gelfand Family Trust, and Herbert M. Gelfand as trustee. (See
Exhibit 2.5 in the Trust's Annual Report on Form 10-K for the year
ended December 31, 1994 incorporated herein by reference.)
2.6 Independent Committee Reserve Contribution Agreement dated August 1,
1994 between the Partnership, affiliated partnerships, and Citicorp
Trust N.A. as trustee. (See Exhibit 2.6 in the Trust's Annual Report
on Form 10-K for the year ended December 31, 1994 incorporated herein
by reference.)
</TABLE>
(b) Reports on Form 8-K.
None.
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<PAGE>
(c) The information set forth in Item 14(a) (3) of this Annual Report on
Form 10-K is incorporated herein by reference.
(d) All information required by Regulation S-X will be furnished by the
Trust to its Beneficiaries in its annual report. Therefore, this Item is not
applicable.
-11-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) 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.
DE ANZA PROPERTIES-XI, LTD. LIQUIDATING TRUST
By /s/ Herbert M. Gelfand
----------------------
Herbert M. Gelfand
Trustee
Date: March 28, 1997
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<PAGE>
DE ANZA PROPERTIES - XI, LTD.
LIQUIDATING TRUST
AUDITED FINANCIAL STATEMENTS
December 31, 1996 and 1995
<PAGE>
De Anza Properties - XI, Ltd. Liquidating Trust
December 31, 1996 and 1995
Contents
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Auditors.............................................. 1
Audited Financial Statements
Balance Sheets.............................................................. 2
Statements of Operations.................................................... 3
Statement of Changes in Beneficiaries' Capital.............................. 4
Statements of Cash Flows.................................................... 5
Notes to Financial Statements............................................... 7
</TABLE>
<PAGE>
Report of Independent Auditors
To the Beneficiaries
De Anza Properties - XI, Ltd. Liquidating Trust
Beverly Hills, California
We have audited the accompanying balance sheets of De Anza Properties - XI ,
Ltd. Liquidating Trust (the Trust) as of December 31, 1996 and 1995, and the
related statements of operations, changes in beneficiaries' capital and cash
flows for the years ended December 31, 1996 and 1995 and the period from August
10, 1994 (date of inception) through December 31, 1994. These financial
statements are the responsibility of Herbert M. Gelfand, the trustee. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Trust as of December 31,
1996 and 1995, and the results of its operations and cash flows for the years
ended December 31, 1996 and 1995 and the period from August 10, 1994 (date of
inception) through December 31, 1994, in conformity with generally accepted
accounting principles.
ERNST & YOUNG, LLP
Los Angeles, California
January 21, 1997
1
<PAGE>
De Anza Properties - XI, Ltd. Liquidating Trust
Balance Sheets
<TABLE>
<CAPTION>
December 31,
1996 1995
----------------------
<S> <C> <C>
ASSETS
CASH (Note 1) $344,977 $ 340,139
RESTRICTED CASH (Notes 1 and 2) 597,635 707,075
INTEREST RECEIVABLE 2,577 5,829
----------------------
$945,189 $1,053,043
======================
LIABILITIES AND BENEFICIARIES' CAPITAL
ACCOUNTS PAYABLE AND ACCRUED EXPENSES, including
$3,539 and $3,092 due to related parties at
December 31, 1996 and 1995, respectively (Note 4) $ 22,155 $ 21,673
UNRECOGNIZED GAIN (Note 2) 597,635 707,075
----------------------
619,790 728,748
BENEFICIARIES' CAPITAL 325,399 324,295
----------------------
$945,189 $1,053,043
======================
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
2
<PAGE>
De Anza Properties - XI, Ltd. Liquidating Trust
Statements of Operations
<TABLE>
<CAPTION>
For the Period
August 10, 1994
Year Ended (Date of Inception)
December 31, through December 31,
1996 1995 1994
--------------------------------------------------
<S> <C> <C> <C>
INCOME
Gain on sale of property and equipment
(Notes 2 and 3) $ 149,535 $159,000 $ -
Interest and dividends 48,490 47,872 11,554
Other 2,073 3,151 332
--------------------------------------------------
200,098 210,023 11,886
--------------------------------------------------
EXPENSES
Professional fees and services,
including $9,483, $16,207 and $19,468
paid to related parties during 1996,
1995 and 1994, respectively (Note 4) 22,097 63,053 30,103
Salaries paid to related parties (Note 4) 16,591 19,434 8,166
Other, including $1,408, $1,288 and $332
paid to related parties during 1996,
1995 and 1994, respectively (Note 4) 10,771 39,898 37,867
--------------------------------------------------
49,459 122,385 76,136
--------------------------------------------------
NET INCOME (LOSS) $ 150,639 $ 87,638 $(64,250)
==================================================
INCOME (LOSS) PER 1% BENEFICIARY
INTEREST (Note 5) $1,506.39 $876.38 $(642.50)
==================================================
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
3
<PAGE>
De Anza Properties - XI, Ltd. Liquidating Trust
Statement of Changes in Beneficiaries' Capital
Years Ended December 31, 1996 and 1995 and
For the Period August 10, 1994 (Date of Inception) through December 31, 1994
<TABLE>
<CAPTION>
<S> <C>
BALANCE - August 10, 1994 (date of inception) -
CAPITAL CONTRIBUTIONS - for the period from August 10, 1994
(date of inception) through December 31, 1994 $ 750,907
NET LOSS - for the period from August 10, 1994
(date of inception) through December 31, 1994 (64,250)
---------
BALANCE - January 1, 1995 686,657
CAPITAL DISTRIBUTIONS - for the year ended December 31, 1995 (450,000)
NET INCOME - for the year ended December 31, 1995 87,638
---------
BALANCE - December 31, 1995 324,295
CAPITAL DISTRIBUTIONS - for the year ended December 31, 1996 (149,535)
NET INCOME - for the year ended December 31, 1996 150,639
---------
BALANCE - December 31, 1996 $ 325,399
=========
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
4
<PAGE>
De Anza Properties - XI, Ltd. Liquidating Trust
Statements of Cash Flows
<TABLE>
<CAPTION>
For the Period
August 10, 1994
(Date of
Year Ended Inception) through
December 31, December 31,
1996 1995 1994
--------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Gross rents received from real estate operations - - $ 8,933
Cash paid to suppliers, including $27,483,
$36,929 and $27,966 paid to related parties
during 1996, 1995 and 1994, respectively $ (48,977) $(152,251) (52,988)
Interest and other income received 53,815 45,889 36,594
--------------------------------------------------------
Net cash provided by (used in) operating
activities 4,838 (106,362) (7,461)
--------------------------------------------------------
INVESTING ACTIVITIES
Release of restricted cash 109,440 159,000 -
Addition to restricted cash - - (866,075)
Proceeds from sale of property and equipment 40,095 - -
--------------------------------------------------------
Net cash provided by (used in) investing
activities 149,535 159,000 (866,075)
--------------------------------------------------------
FINANCING ACTIVITIES
Capital contributions - - 1,611,037
Capital distributions (149,535) (450,000) -
--------------------------------------------------------
Net cash (used in) provided by financing
activities (149,535) (450,000) 1,611,037
-----------------------------------------------------------
NET INCREASE (DECREASE) IN CASH 4,838 (397,362) 737,501
CASH AT BEGINNING OF PERIOD 340,139 737,501 -
-----------------------------------------------------------
CASH AT END OF PERIOD $ 344,977 $ 340,139 $ 737,501
===========================================================
RECONCILIATION OF NET INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES
Net income (loss) $ 150,639 $ 87,638 $ (64,250)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Gain on sale of property and equipment (149,535) (159,000) -
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable 3,252 (5,134) 52,719
Increase (decrease) in accounts payable and
accrued expenses 482 (29,866) 4,070
-----------------------------------------------------------
Net cash provided by (used in) operating
activities $ 4,838 $(106,362) $ (7,461)
===========================================================
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
5
<PAGE>
De Anza Properties - XI, Ltd. Liquidating Trust
Statements of Cash Flows (Continued)
NONCASH ACTIVITY
On September 30, 1994, De Anza Properties - XI, Ltd. was liquidated, and various
assets and liabilities were transferred to the De Anza Properties - XI
Liquidating Trust (Notes 1 and 2). The noncash assets and liabilities that were
transferred consisted of accounts receivable of $53,414, accounts payable and
accrued expenses of $47,469, and unrecognized gain of $866,075.
See accompanying report of independent auditors and notes to financial
statements.
6
<PAGE>
De Anza Properties - XI, Ltd. Liquidating Trust
Notes to Financial Statements
For the Years Ended December 31, 1996 and 1995 and
For the Period August 10, 1994 (Date of Inception) through December 31, 1994
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
De Anza Properties - XI, Ltd. Liquidating Trust (the Trust) was formed on August
10, 1994 to acquire the remaining assets, assume the remaining liabilities and
wind up the affairs of De Anza Properties - XI, Ltd. (the Partnership), pursuant
to a plan of liquidation of the Partnership. The Partnership ceased operations
and dissolved as of August 18, 1994, and subsequently terminated on December 28,
1994. Subsequent to August 18, 1994, all of the remaining assets and
liabilities of the Partnership and its reserves, and the right to reserves held
in various trusts were contributed to the Trust by the Partnership on behalf of
the beneficiaries of the Trust, of which Herbert M. Gelfand, former operating
general partner of the Partnership, is the trustee (Trustee). The Trust will
settle Partnership liabilities and will terminate upon final release and
distribution of reserves. Beneficial interest in the Trust will be maintained by
the Partnership's former limited partners in accordance with each partner's pro
rata class ownership interest in the Partnership.
Income Taxes
No provision for income taxes has been included in the accompanying financial
statements since the beneficiaries are responsible for reflecting their share of
income or loss on their respective income tax returns.
Cash and Cash Equivalents
The Trust invests cash not needed for working capital in highly liquid short-
term investments consisting primarily of money market funds and certificates of
deposit, with original maturities generally ranging from one to three months.
The Trust considers all such items to be cash equivalents. At December 31,
1996, and periodically, balances in various accounts exceeded federally insured
limits. No losses have been experienced to date related to such accounts. The
Trust places its cash and cash equivalents with quality financial institutions
and believes it is not exposed to any significant concentration of credit risk
on cash and cash equivalents.
See accompanying report of independent auditors.
7
<PAGE>
De Anza Properties - XI, Ltd. Liquidating Trust
Notes to Financial Statements (Continued)
For the Years Ended December 31, 1996 and 1995 and
For the Period August 10, 1994 (Date of Inception) through December 31, 1994
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Restricted Cash
At December 31, 1996 and 1995, the Trust had $597,635 and $707,075,
respectively, in restricted cash. These amounts consist of a General Reserve and
Independent Committee Reserve totaling $488,196 and $109,439, respectively, in
1996 and $488,196 and $218,879, respectively, in 1995 (Note 2).
Financial Instruments
The carrying amount reported in the balance sheet for cash, cash equivalents,
interest receivable and accounts payable approximates fair value due to the
short maturity of these instruments.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
See accompanying report of independent auditors.
8
<PAGE>
De Anza Properties - XI, Ltd. Liquidating Trust
Notes to Financial Statements (Continued)
For the Years Ended December 31, 1996 and 1995 and
For the Period August 10, 1994 (Date of Inception) through December 31, 1994
2. UNRECOGNIZED GAIN
On September 30, 1994, the Partnership contributed the following assets and
liabilities to the Trust on behalf of the beneficiaries:
<TABLE>
<CAPTION>
<S> <C>
Cash:
MHC Reserve $ 159,000
General reserve 488,196
Independent Committee Reserve 218,879
Operating cash (Partnership Expense Reserve) 744,962
Noncash:
Accounts receivable 53,414
Accounts payable and accrued expenses (47,469)
Deferred gain on sale (866,075)
---------
Net capital contribution to the Trust $ 750,907
=========
</TABLE>
Pursuant to the guidelines of Statements of Financial Accounting Standards No.
66, "Accounting for Sales of Real Estate," the Partnership deferred in 1994 the
recognition of gain on that portion of the sales proceeds represented by the MHC
Reserve, General Reserve and Independent Committee Reserve, totaling $866,075.
The unrecognized gain was subsequently transferred to the Trust.
The MHC Reserve was required by the amended sales agreement between the
Partnership and the buyer of the partnership properties, an affiliate of
Manufacturing Home Communities, Inc. (MHC), to fund contingencies arising from
claims by MHC against the Partnership for any misrepresentation related to the
MHC transaction. The General Reserve and Independent Committee Reserve were
established to fund contingent liabilities that may arise out of the MHC
transaction, and the Partnership Expense Reserve, consisting of the remaining
unrestricted funds, was established to fund future administrative costs and
contingencies of the Trust.
See accompanying report of independent auditors.
9
<PAGE>
De Anza Properties - XI, Ltd. Liquidating Trust
Notes to Financial Statements (Continued)
For the Years Ended December 31, 1996 and 1995 and
For the Period August 10, 1994 (Date of Inception) through December 31, 1994
2. UNRECOGNIZED GAIN (continued)
During 1995, the MHC Reserve of $159,000 was released in full and distributed to
the beneficiaries of the Trust, along with $291,000 of excess Partnership
Expense Reserves. During 1996, $109,440 of the original $218,879 Independent
Committee Reserve was released and distributed to the beneficiaries of the
Trust. Accordingly, the Trust recognized gain of $109,440 and $159,000,
respectively, in 1996 and 1995, resulting from the release of these reserves. At
December 31, 1996 and 1995, $597,635 and $707,075, respectively, remained
unrecognized by the Trust.
3. ADDITIONAL GAIN ON SALE OF BAY LAKE ESTATES
In 1994, a small portion of Bay Lake Estates was condemned and the partnership
received approximately $124,000. The Partnership appealed this valuation and in
1996 received an additional $40,095. This additional gain on sale of property
and equipment is included in the determination of net income for the year ended
December 31, 1996.
4. RELATED PARTY TRANSACTIONS
Terra Vista Management, Inc. and De Anza Leasing Corporation, a related party
and affiliate, respectively, of the Trustee, were paid in the aggregate $27,483,
$36,929 and $27,966 during the years ended December 31, 1996 and 1995 and for
the period from August 10, 1994 (date of inception) through December 31, 1994,
respectively, for performing bookkeeping, computer and beneficiary relations
services necessary for the administration of the Trust.
5. INCOME (LOSS) PER 1% BENEFICIARY INTEREST
Income (loss) per 1% beneficiary interest is computed based on each
beneficiary's pro rata limited partner class ownership interest formerly held in
the dissolved Partnership. The 1996 net income of $150,639, the 1995 net income
of $87,638 and the 1994 net loss of $64,250 result in $1,506.39 and $876.38 of
income and $642.50 of loss, respectively, for each 1% interest in the Trust.
See accompanying report of independent auditors.
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 891,527
<SECURITIES> 0
<RECEIVABLES> 3,407
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 894,934
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 894,934
<CURRENT-LIABILITIES> 26,337
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 277,161
<TOTAL-LIABILITY-AND-EQUITY> 894,934
<SALES> 0
<TOTAL-REVENUES> 228,831
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 39,464
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 189,367
<INCOME-TAX> 0
<INCOME-CONTINUING> 189,367
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 189,367
<EPS-PRIMARY> 1,893.67<F1>
<EPS-DILUTED> 1,893.67<F1>
<FN>
<F1>EPS is per 1% Beneficiary Interest
</FN>
</TABLE>
