UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 fiscal year ended December 31, 1997
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 0-11126
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BALCOR EQUITY PROPERTIES-XII
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(Exact name of registrant as specified in its charter)
Illinois 36-3169763
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Road
Bannockburn, Illinois 60015
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
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Securities registered pursuant to Section 12(b) of the Act: None
----
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
-----------------------------
(Title of class)
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 ]
<PAGE>
PART I
Item 1. Business
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Balcor Equity Properties-XII (the "Registrant") is a limited partnership formed
in 1981 under the laws of the State of Illinois. The Registrant raised
$37,447,000 from sales of Limited Partnership Interests. The Registrant has
retained cash reserves from the sale of its real estate investments for
contingencies which exist or may arise. The Registrant's operations currently
consist of interest income earned on short-term investments and the payment of
administrative expenses.
The Registrant utilized the net offering proceeds to acquire seven real
property investments and a minority joint venture interest in one additional
real property, and has since disposed of all of these investments. The
Partnership Agreement generally provides that the proceeds of any sale or
refinancing of the Registrant's properties will not be reinvested in new
acquisitions.
The Partnership Agreement provides for the dissolution of the Registrant upon
the occurrence of certain events, including the disposition of all interests in
real estate. The Registrant sold all of its remaining properties in 1996. The
Registrant has retained a portion of the cash from the property sales to
satisfy obligations of the Registrant, as well as establish a reserve for
contingencies. The timing of the termination of the Registrant and final
distribution of cash will depend upon the nature and extent of liabilities and
contingencies which exist or may arise. Such contingencies may include legal
and other fees and costs stemming from litigation involving the Registrant,
including, but not limited to, the lawsuits discussed in "Item 3. Legal
Proceedings." Due to this litigation, the Registrant will not be dissolved and
the reserves will be held by the Registrant until the conclusion of all
contingencies. There can be no assurances as to the time frame for conclusion
of these contingencies.
The Registrant no longer has an ownership interest in any real estate
investment. The General Partner is not aware of any material potential
liability relating to environmental issues or conditions affecting real estate
formerly owned by the Registrant.
The officers and employees of Balcor Partners-XII, the General Partner of the
Registrant, and its affiliates perform services for the Registrant. The
Registrant currently has no employees engaged in its operations.
Item 2. Properties
- ------------------
As of December 31, 1997, the Registrant did not own any properties.
In the opinion of the General Partner, the Registrant has obtained adequate
insurance coverage.
See Notes to Financial Statements for other information regarding former real
estate property investments.
<PAGE>
Item 3. Legal Proceedings
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Masri vs. Lehman Brothers, Inc., et al.
- --------------------------------------
On February 29, 1996, a proposed class action complaint was filed, Raymond
Masri vs. Lehman Brothers, Inc., et al., Case No. 96/103727 (Supreme Court of
the State of New York, County of New York). The Registrant, additional limited
partnerships which were sponsored by The Balcor Company, three limited
partnerships sponsored by the predecessor of Lehman Brothers, Inc. (together
with the Registrant and the affiliated partnerships, the "Defendant
Partnerships"), Lehman Brothers, Inc. and Smith Barney, Inc. are defendants.
The complaint alleges, among other things, common law fraud and deceit,
negligent misrepresentation and breach of fiduciary duty relating to the
disclosure of information in the offering of limited partnership interests in
the Defendant Partnerships. The complaint seeks judgment for compensatory
damages equal to the amount invested in the Defendant Partnerships by the
proposed class plus interest accrued thereon; general damages for injuries
arising from the defendants' alleged actions; recovery from the defendants of
all profits received by them as a result of their alleged actions relating to
the Defendant Partnerships; exemplary damages; attorneys' fees and other costs.
The defendants intend to vigorously contest this action. No class has been
certified as of this date. The Registrant believes it has meritorious defenses
to contest the claims. It is not determinable at this time whether or not an
unfavorable decision in this action would have a material adverse impact on the
Registrant.
Plaintiffs' counsel has indicated an intent to withdraw this complaint.
Raymond Masri has joined as an additional plaintiff in the Lenore Klein matter
discussed below.
Klein, et al. vs. Lehman Brothers, Inc., et al.
- -----------------------------------------------
On August 30, 1996, a proposed class action complaint was filed, Lenore Klein
vs. Lehman Brothers, Inc., et al. (Superior Court of New Jersey, Law Division,
Union County, Docket No. Unn-L-5162-96). The complaint was amended on each of
October 18, 1996, December 5, 1997 and January 15, 1998. The Registrant,
additional limited partnerships which were sponsored by The Balcor Company
(together with the Registrant, the "Affiliated Partnerships"), The Balcor
Company, American Express Company, Lehman Brothers, Inc., Smith Barney, Inc.,
American Express Financial Advisors, and other affiliated entities and various
individuals are named defendants in the action. The most recent amended
complaint, plaintiffs' Third Amended Complaint, alleges, among other things,
common law fraud and deceit, negligent misrepresentation, breach of contract,
breach of fiduciary duty and violation of certain New Jersey statutes relating
to the disclosure of information in the offering of limited partnership
interests in the Affiliated Partnerships, the marketing of interests in the
Affiliated Partnerships and the acquisition of real properties for the
Affiliated Partnerships. The Third Amended Complaint seeks judgment for
compensatory damages equal to the amount invested in the Affiliated
Partnerships by the proposed class plus interest; general damages for injuries
<PAGE>
arising from the defendants' alleged actions; equitable relief, including
rescission, on certain counts; punitive damages; treble damages on certain
counts; recovery from the defendants of all profits received by them as a
result of their alleged actions relating to the Affiliated Partnerships;
attorneys' fees and other costs.
The defendants intend to vigorously contest this action. No class has been
certified as of this date. The Registrant believes it has meritorious defenses
to contest the claims. It is not determinable at this time whether or not an
unfavorable decision in this action would have a material adverse impact on the
Registrant.
Item 4. Submission of Matters to a Vote of Security Holders
- -----------------------------------------------------------
No matters were submitted to a vote of the Limited Partners of the Registrant
during 1997.
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
- -----------------------------------------------------------------------------
There has not been an established public market for Limited Partnership
Interests and it is not anticipated that one will develop. For information
regarding distributions, see "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital
Resources".
As of December 31, 1997, the number of record holders of Limited Partnership
Interests of the Registrant was 3,199.
Item 6. Selected Financial Data
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Year ended December 31,
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1997 1996 1995 1994 1993
--------- ---------- ---------- ---------- ------------
Total income $316,105 $8,278,842 $9,271,354 $ 8,743,519 $ 8,223,415
Income (loss) before
gain on sales of
properties and
extraordinary
items 22,677 (109,614) (547,006) (1,032,968) (952,362)
Net income (loss) 22,677 26,597,761 (547,006) (682,968) (755,843)
Net income (loss)
per Limited Part-
nership Interest -
Basic and Diluted .61 695.36 (14.46) (18.06) (19.98)
Total assets 1,828,319 20,139,284 25,940,108 27,188,193 27,222,063
Mortgage notes
payable None None 30,082,916 30,487,859 30,815,836
Distributions per
Limited Partner-
ship Interest (A) 482.85 15.00 None None None
(A) These amounts represent distributions of original capital.
Item 7. Management's Discussion and Analysis of Financial Condition and
- -----------------------------------------------------------------------
Results of Operations
- ---------------------
Operations
- ----------
Summary of Operations
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<PAGE>
Balcor Equity Properties - XII (the "Partnership") sold its remaining five
properties in 1996. The operations of the Partnership during 1997 were
comprised primarily of the collection of interest income on short-term
investments which was substantially offset by the payment of administrative and
final operating expenses. The gains recognized on the 1996 property sales
resulted in a decrease in net income during 1997 as compared to 1996. The
Partnership generated a net loss from operations during 1995. Further
discussion of the Partnership's operations is summarized below.
1997 Compared to 1996
- ---------------------
During 1996, the Partnership sold the Brierwood, Cedar Ridge, DeFoors Creek,
Sandridge - Phase I and Somerset Village apartment complexes and recognized
gains in connection with these sales of $27,809,874. As a result of the sales
of these properties, rental and service income, interest expense on mortgage
notes payable, depreciation, amortization of deferred expenses and property
management fees ceased during 1996.
Due to higher average cash balances resulting from the investment of net
proceeds received in connection with the 1996 property sales prior to
distribution to Limited Partners in January and April of 1997, interest income
on short-term investments increased during 1997 as compared to 1996.
The Partnership recognized other income during 1997 primarily in connection
with refunds of prior years' insurance premiums and real estate taxes relating
to the Partnership's sold properties.
During 1996, the Partnership incurred interest expense on short-term loan -
affiliate. The loan was repaid with proceeds from the sale of the Brierwood
Apartments and interest expense on short-term loan - affiliate ceased during
1996.
As a result of the 1996 property sales, property operating expense decreased
during 1997 as compared to 1996. During 1997, the Partnership paid certain
expenses related to the properties sold in 1996.
As a result of the 1996 property sales, real estate tax expense decreased
during 1997 as compared to 1996. During 1997, the Partnership paid additional
real estate taxes related to one of the Partnership's sold properties.
Decreased accounting, portfolio management and legal fees in 1997 resulted in a
decrease in administrative expenses during 1997 as compared to 1996.
In connection with the 1996 property sales the Partnership paid $722,414 in
prepayment penalties and wrote off the remaining unamortized deferred expenses
in the amount of $380,085. These amounts were recognized as an extraordinary
item and classified as debt extinguishment expense for financial statement
purposes.
1996 Compared to 1995
- ---------------------
As a result of the 1996 property sales, rental and service income decreased by
<PAGE>
approximately $1,478,000 as compared to 1995. Increased rental rates at four of
the five sold properties resulted in higher rental income of approximately
$298,000, partially offsetting the decrease in rental and service income during
1996 as compared to 1995.
Due to higher average cash balances resulting from net proceeds received in
connection with the 1996 property sales and interest earned on escrow deposits,
interest income on short-term investments increased during 1996 as compared to
1995.
As a result of the 1996 property sales, interest expense on mortgage notes
payable, depreciation expense, amortization of deferred expenses and property
management fees ceased during 1996 as compared to 1995.
The repayment of the General Partner loan from proceeds from the sale of the
Brierwood Apartments during the third quarter of 1996 resulted in a decrease in
interest on short-term loan - affiliate for 1996 as compared to 1995.
Property operating expense for 1996 decreased when compared to 1995 by
approximately $724,000 due to the 1996 property sales and additional repair and
maintenance expenses incurred in 1995, including the exterior painting of the
Brierwood Apartments. This decrease was partially offset by higher payroll,
utilities, and insurance expense at all of the properties and exterior painting
and repair expenditures in 1996 at Somerset Apartments totaling approximately
$390,000.
Real estate tax expense for 1996 decreased when compared to 1995 by
approximately $188,000 due to the 1996 property sales. Real estate tax expense
also decreased due to a refund of approximately $56,000 received from the
taxing authority for Somerset Village Apartments and due to lower taxes of
approximately $37,000 at the DeFoors Creek Apartments as a result of a decrease
in the assessed value and tax rate. These decreases were partially offset by an
increase of approximately $31,000 at the Sandridge - Phase I Apartments due to
an increase in the assessed value of the property.
The Partnership incurred legal, consulting, printing and postage costs in
connection with a tender offer during the fourth quarter of 1995. As a result,
administrative expenses decreased during 1996 as compared to 1995.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership as of December 31, 1997 decreased by
approximately $18,022,000 as compared to December 31, 1996 primarily due to
special distributions made in January and April 1997 to the Limited Partners
from proceeds received in connection with the 1996 property sales. Cash of
approximately $59,000 was provided by operating activities consisting of
interest income on short-term investments, other income and the collection of
accounts receivable. These amounts were substantially offset by the payment of
expenses related to the properties sold in 1996 and administrative expenses.
Cash used in financing activities consisted of the payment of distributions to
the Limited Partners of approximately $18,081,000.
The Partnership Agreement provides for the dissolution of the Partnership upon
<PAGE>
the occurrence of certain events, including the disposition of all interests in
real estate. The Partnership sold all of its remaining properties during 1996.
The Partnership has retained a portion of the cash from the property sales to
satisfy obligations of the Partnership as well as establish a reserve for
contingencies. The timing of the termination of the Partnership and final
distribution of cash will depend upon the nature and extent of liabilities and
contingencies which exist or may arise. Such contingencies may include legal
and other fees and costs stemming from litigation involving the Partnership
including, but not limited to, the lawsuits discussed in "Item 3. Legal
Proceedings". Due to this litigation, the Partnership will not be dissolved and
the reserves will be held by the Partnership until the conclusion of all
contingencies. There can be no assurances as to the time frame for conclusion
of these contingencies.
During January 1998, the Partnership made a distribution of $309,889 ($8.28 per
Interest) to Limited Partners from remaining available Net Cash Proceeds. The
Partnership paid two distributions totaling $482.85 per Interest in 1997 and
one distribution of $15 per Interest in 1996 from Net Cash Proceeds. Including
the January 1998 distribution, Limited Partners have received distributions of
Net Cash Receipts of $70 and Net Cash Proceeds of $566.63, totaling $636.63 per
$1,000 Interest, as well as certain tax benefits. No distributions are
anticipated to be made prior to the termination of the Partnership. However,
after paying final partnership expenses, any remaining cash reserves will be
distributed. Investors will not recover all of their original investment.
Item 8. Financial Statements and Financial Statement Supplementary Data
- -----------------------------------------------------------------------
See Index to Financial Statements in this Form 10-K.
The supplemental financial information specified by Item 302 of Regulation S-K
is not applicable.
The net effect of the differences between the financial statements and the tax
returns is summarized as follows:
December 31, 1997 December 31, 1996
----------------------- -------------------------
Financial Tax Financial Tax
Statements Returns Statements Returns
---------- --------- ---------- ---------
Total assets $1,828,319 $6,361,598 $20,139,284 $20,139,284
Partners' capital
(deficit) accounts:
General Partner (42,000) (57,544) (42,000) None
Limited Partners 1,832,932 6,392,815 19,891,539 24,400,911
Net income (loss):
General Partner None (57,544) 558,773 1,520,767
Limited Partners 22,677 73,188 26,038,988 42,340,240
Per Limited Part-
nership Interest .61(A) 1.95 695.36(A) 1,130.67
(A) Amount represents basic and diluted net income per Limited Partnership
Interest.
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
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Financial Disclosure
- --------------------
There have been no changes in or disagreements with accountants on any matter
of accounting principles, practices or financial statement disclosure.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
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(a) Neither the Registrant nor Balcor Partners-XII, its General Partner, has a
Board of Directors.
(b, c & e) The names, ages and business experiences of the executive officers
and significant employees of the General Partner of the Registrant are as
follows:
TITLE OFFICERS
Chairman, President and Chief Thomas E. Meador
Executive Officer
Senior Vice President Alexander J. Darragh
Senior Vice President John K. Powell, Jr.
Senior Managing Director, Chief Jayne A. Kosik
Financial Officer, Treasurer
and Assistant Secretary
Thomas E. Meador (age 50) joined Balcor in July 1979. He is Chairman,
President and Chief Executive Officer and has responsibility for all ongoing
day-to-day activities at Balcor. He is a member of the board of directors of
The Balcor Company. He is also Senior Vice President of American Express
Company and is responsible for its real estate operations worldwide. Prior to
joining Balcor, Mr. Meador was employed at the Harris Trust and Savings Bank in
the commercial real estate division where he was involved in various lending
activities. Mr. Meador received his M.B.A. degree from the Indiana University
Graduate School of Business.
Alexander J. Darragh (age 43) joined Balcor in September 1988 and is
responsible for real estate advisory services for Balcor and American Express
Company. Mr. Darragh received masters' degrees in Urban Geography from Queen's
University and in Urban Planning from Northwestern University.
John K. Powell Jr. (age 47) joined Balcor in September 1985 and is responsible
for portfolio and asset management matters relating to Balcor's partnerships.
Mr. Powell also has supervisory responsibility for Balcor's risk management
function. He is a member of the board of directors of The Balcor Company. He
received a Master of Planning degree from the University of Virginia. Mr.
Powell has been designated a Certified Real Estate Financier by the National
Society for Real Estate Finance and is a full member of the Urban Land
Institute.
Jayne A. Kosik (age 40) joined Balcor in August 1982 and, as Chief Financial
Officer, is responsible for Balcor's financial, human resources and treasury
functions. From June 1989 until October 1996, Ms. Kosik had supervisory
responsibility for accounting functions relating to Balcor's public and private
partnerships. She is also Treasurer and a Senior Managing Director of The
Balcor Company. Ms. Kosik is a Certified Public Accountant.
<PAGE>
(d) There is no family relationship between any of the foregoing officers.
(f) None of the foregoing officers or employees are currently involved in any
material legal proceedings nor were any such proceedings terminated during the
fourth quarter of 1997.
Item 11. Executive Compensation
- -------------------------------
The Registrant paid $1,362 in 1997 with respect to one of the executive
officers and directors of Balcor Partners-XII, the General Partner. The
Registrant has not paid and does not propose to pay any remuneration to the
remaining executive officers and directors of the General Partner. Certain of
the remaining officers receive compensation from The Balcor Company (but not
from the Registrant) for services performed for various affiliated entities,
which may include services performed for the Registrant. However, the General
Partner believes that any such compensation attributable to services performed
for the Registrant is immaterial to the Registrant. See Note 8 of Notes to
Financial Statements for the information relating to transactions with
affiliates.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- -----------------------------------------------------------------------
(a) The following entities are the sole Limited Partners which own beneficially
more than 5% of the outstanding Limited Partnership Interests of the
Registrant:
Name and Amount and
Address of Nature of Percent
Beneficial Beneficial of
Title of Class Owner Ownership Class
- -------------------------------------------------------------------------------
Limited WIG XII 4,166.90 11.13%
Partnership Partners Limited
Interests Chicago, Partnership
Illinois Interests
Limited Metropolitan 3,351.50 8.95%
Partnership Acquisition VII Limited
Interests Greenville, Partnership
South Carolina Interests
For purposes of this Item 12, WIG XII Partners is an affiliate of Metropolitan
Acquisition VII and, collectively, they own 20.08% of the Interests.
(b) Balcor Partners-XII and its officers and partners own as a group the
following Limited Partnership Interests in the Registrant:
Amount
Beneficially
Title of Class Owned Percent of Class
-------------- ------------- ----------------
Limited Partnership
Interests 70 Interests Less than 1%
<PAGE>
Relatives of the partners and affiliates of the officers of the General Partner
own 22 Limited Partnership Interests.
(c) The Registrant is not aware of any arrangements, the operation of which may
result in a change of control of the Registrant.
Item 13. Certain Relationships and Related Transactions
- -------------------------------------------------------
(a & b) See Note 8 of Notes to Financial Statements for additional information
relating to transactions with affiliates.
See Note 4 of Notes to Financial Statements for information relating to the
Partnership Agreement and the allocation of distributions and profits and
losses.
(c) No management person is indebted to the Registrant.
(d) The Registrant has no outstanding agreements with any promoters.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
- ------------------------------------------------------------------------
(a)
(1 & 2) See Index to Financial Statements in this Form 10-K.
(3) Exhibits:
(3) The Amended and Restated Agreement of Limited Partnership set forth as
Exhibit 3 to the Registrant's Post-Effective Amendment No. 1 to the
Registration Statement on Form S-11 dated June 28, 1983 (Registration
No. 2-76947) is incorporated herein by reference.
(4) Certificate of Limited Partnership set forth as Exhibit 4.1 to the
Registrant's Registration Statement on Form S-11 dated July 2, 1982
(Registration No. 2-76947) and Form of Confirmation regarding Interests in the
Registrant set forth as Exhibit 4.2 to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1992 are hereby incorporated herein by
reference.
(10) Material Contracts:
(a) Agreement of Sale relating to the sale of Somerset Village Apartments,
Tempe, Arizona previously filed as Exhibit 10 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ending June 30, 1996 is incorporated herein
by reference.
(b) (i) Agreement of Sale and attachment thereto relating to the sale of
Sandridge Apartments - Phase I, Pasadena, Texas, previously filed as Exhibit
2(a) to the Registrant's Current Report on Form 8-K dated August 27, 1996 is
incorporated herein by reference.
(ii) Modification Agreement relating to the sale of Sandridge Apartments -
Phase I, Pasadena, Texas, previously filed as Exhibit 2(b) to the Registrant's
Current Report on Form 8-K dated August 27, 1996 is incorporated herein by
reference.
(iii) Second Modification Agreement relating to the sale of Sandridge
Apartments - Phase I, Pasadena, Texas, previously filed as Exhibit (99) to the
Registrant's Current Report on Form 8-K dated September 25, 1996, is
incorporated herein by reference.
(iv) Letter Agreement relating to the sale of Sandridge Apartments - Phase I,
Pasadena, Texas, previously filed as Exhibit (c)(ii) to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, is
incorporated herein by reference.
(c) (i) Agreement of Sale and attachment thereto relating to the sale of
DeFoors Creek Apartments, Atlanta, Georgia, previously filed as Exhibit 2 to
the Partnership's Current Report on Form 8-K dated September 9, 1996 is
incorporated herein by reference.
<PAGE>
(ii) Letter dated October 2, 1996 relating to the termination of the contract
for the sale of DeFoors Creek Apartments, Atlanta, Georgia, previously filed as
Exhibit (10)(c)(ii) to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996, is incorporated herein by reference.
(iii) First Amendment to Agreement of Sale and Escrow Agreement dated October
10, 1996 reinstating the contract for the sale of DeFoors Creek Apartments,
Atlanta, Georgia, previously filed as Exhibit (10)(c)(iii) to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, is
incorporated herein by reference.
(iv) Second Amendment to Agreement of Sale and Escrow Agreement dated October
17, 1996 relating to the sale of DeFoors Creek Apartments, Atlanta, Georgia,
previously filed as Exhibit (10)(c)(iv) to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1996, is incorporated herein by
reference.
(v) Letter dated October 23, 1996 relating to the termination of the contract
for the sale of DeFoors Creek Apartments, Atlanta, Georgia, previously filed as
Exhibit (10)(c)(v) to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996, is incorporated herein by reference.
(vi) Third Amendment of Agreement of Sale and Escrow Agreement dated October
31, 1996 reinstating the contract for the sale of DeFoors Creek Apartments,
Atlanta, Georgia, previously filed as Exhibit (10)(c)(vi) to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, is
incorporated herein by reference.
(d) (i) Agreement of Sale and attachment thereto relating to the sale of Cedar
Ridge Apartments, Baytown, Texas, previously filed as Exhibit 2(i) to the
Registrant's Current Report on Form 8-K dated September 25, 1996 is
incorporated herein by reference.
(ii) Letter Agreement relating to the sale of Cedar Ridge Apartments, Baytown,
Texas, previously filed as Exhibit 2 (ii) to the Registrant's Current Report on
Form 8-K dated September 25, 1996 is incorporated herein by reference.
(27) Financial Data Schedule of the Registrant for 1997 is attached hereto.
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter
ended December 31, 1997.
<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.
BALCOR EQUITY PROPERTIES-XII
By:/s/Jayne A. Kosik
--------------------------------
Jayne A. Kosik
Senior Managing Director and Chief
Financial Officer (Principal
Accounting Officer)
of Balcor Partners-XII, the
General Partner
Date: March 17, 1998
------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
- ---------------------- ------------------------------ ------------
President and Chief Executive
Officer (Principal Executive
Officer) of Balcor Partners-XII,
the General Partner
/s/Thomas E. Meador March 17, 1998
---------------- --------------
Thomas E. Meador
Senior Managing Director and Chief
Financial Officer (Principal
Accounting Officer) of
Balcor Partners-XII, the General
Partner
/s/Jayne A. Kosik March 17, 1998
- -------------------- --------------
Jayne A. Kosik
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Report of Independent Accountants
Financial Statements:
Balance Sheets, December 31, 1997 and 1996
Statements of Partners' Capital (Deficit), for the years ended December 31,
1997, 1996 and 1995
Statements of Income and Expenses, for the years ended December 31, 1997, 1996
and 1995
Statements of Cash Flows, for the years ended December 31, 1997, 1996 and 1995
Notes to Financial Statements
Financial Statement Schedules are omitted for the reason that they are
inapplicable or equivalent information has been included elsewhere herein.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Balcor Equity Properties-XII:
We have audited the financial statements of Balcor Equity Properties-XII (An
Illinois Limited Partnership) as listed in the Index of this Form 10-K. These
financial statements are the responsibility of the Partnership's management.
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 Balcor Equity Properties-XII
at December 31, 1997 and 1996, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1997, in
conformity with generally accepted accounting principles.
As described in Note 2 to the financial statements, the partnership agreement
provides for the dissolution of the Partnership upon the disposition of all its
interests in real estate. At December 31, 1996, the Partnership had disposed of
all its real estate interests. Upon resolution of the litigation described in
Note 12 to the financial statements, the Partnership intends to cease
operations and dissolve.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
March 11, 1998
<PAGE>
BALCOR EQUITY PROPERTIES - XII
(An Illinois Limited Partnership)
BALANCE SHEETS
December 31, 1997 and 1996
ASSETS
1997 1996
--------------- --------------
Cash and cash equivalents $ 1,801,748 $ 19,824,096
Accounts and accrued interest receivable 26,571 315,188
--------------- --------------
$ 1,828,319 $ 20,139,284
=============== ==============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 13,705 $ 214,819
Due to affiliates 23,682 74,926
--------------- --------------
Total liabilities 37,387 289,745
Commitments and contingencies
Limited Partners' capital (37,447
Interests issued and outstanding) 1,832,932 19,891,539
General Partner's deficit (42,000) (42,000)
--------------- --------------
Total partners' capital 1,790,932 19,849,539
--------------- --------------
$ 1,828,319 $ 20,139,284
=============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES - XII
(An Illinois Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
for the years ended December 31, 1997, 1996 and 1995
Partners' Capital (Deficit) Accounts
-----------------------------------------
General Limited
Total Partner Partners (A)
------------- ------------- -------------
Balance at December 31, 1994 $ (5,125,268) $ (595,303) $ (4,529,965)
Net loss for the year
ended December 31, 1995 (547,006) (5,470) (541,536)
------------- ------------- -------------
Balance at December 31, 1995 (5,672,274) (600,773) (5,071,501)
Cash Distribution to Limited
Partners (B) (561,705) (561,705)
Deemed distribution (C) (514,243) (514,243)
Net income for the year
ended December 31, 1996 26,597,761 558,773 26,038,988
------------- ------------- -------------
Balance at December 31, 1996 19,849,539 (42,000) 19,891,539
Cash Distribution to Limited
Partners (B) (18,081,284) (18,081,284)
Net income for the year
ended December 31, 1997 22,677 None 22,677
------------- ------------- -------------
Balance at December 31, 1997 $ 1,790,932 $ (42,000) $ 1,832,932
============= ============= =============
(A) Includes a $70,000 investment by the General Partner.
(B) Summary of distributions per Limited Partnership Interest:
1997 1996 1995
------------- ------------- -------------
First Quarter $ 225.00 None None
Second Quarter 257.85 None None
Third Quarter None None None
Fourth Quarter None $ 15.00 None
(C) This amount represents a state withholding tax paid on behalf of the
Limited Partners relating to the gain on the sale of the DeFoors
Creek Apartments.
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES - XII
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the years ended December 31, 1997, 1996 and 1995
1997 1996 1995
------------- ------------- -------------
Income:
Rental and service $ 8,060,332 $ 9,240,631
Interest on short-term
investments $ 267,421 218,510 30,723
Other income 48,684
------------- ------------- -------------
Total income 316,105 8,278,842 9,271,354
------------- ------------- -------------
Expenses:
Interest on mortgage
notes payable 2,424,115 2,880,912
Interest on short-term
loan - affiliate 21,152 52,902
Depreciation 1,056,973 1,273,190
Amortization of deferred
expenses 51,073 60,614
Property operating 77,742 3,397,145 3,731,112
Real estate taxes 42,742 651,962 901,493
Property management fees 402,252 460,331
Administrative 172,944 383,784 457,806
------------- ------------- -------------
Total expenses 293,428 8,388,456 9,818,360
------------- ------------- -------------
Income (loss) before gain on sale
of properties and extraordinary
item 22,677 (109,614) (547,006)
Gain on sale of properties 27,809,874
------------- ------------ -------------
Income (loss) before
extraordinary item 22,677 27,700,260 (547,006)
Extraordinary item:
Debt extinguishment expense (1,102,499)
------------- ------------- -------------
Net income (loss) $ 22,677 $ 26,597,761 $ (547,006)
============= ============= =============
Income (loss) before
extraordinary item allocated
to General Partner None $ 569,798 $ (5,470)
============= ============= =============
Income (loss) before
extraordinary item allocated
to Limited Partners $ 22,677 $ 27,130,462 $ (541,536)
============= ============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES - XII
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the years ended December 31, 1997, 1996 and 1995
(Continued)
1997 1996 1995
------------- ------------- -------------
Income (loss) before
extraordinary item per
Limited Partnership Interest
(37,447 issued and outstanding)
- Basic and Diluted $ 0.61 $ 724.51 $ (14.46)
============= ============= =============
Extraordinary item allocated
to General Partner None $ (11,025) None
============= ============= =============
Extraordinary item allocated
to Limited Partners None $ (1,091,474) None
============= ============= =============
Extraordinary item per
Limited Partnership Interest
(37,447 issued and outstanding)
- Basic and Diluted None $ (29.50) None
============= ============= =============
Net income (loss) allocated to
General Partner None $ 558,773 $ (5,470)
============= ============= =============
Net income (loss) allocated to
Limited Partners $ 22,677 $ 26,038,988 $ (541,536)
============= ============= =============
Net income (loss) per Limited
Partnership Interest (37,447
issued and outstanding)
- Basic and Diluted $ 0.61 $ 695.36 $ (14.46)
============= ============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES - XII
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the years ended December 31, 1997, 1996 and 1995
1997 1996 1995
------------- ------------- -------------
Operating activities:
Net income (loss) $ 22,677 $ 26,597,761 $ (547,006)
Adjustments to reconcile
net income (loss) to
net cash provided by
operating activities:
Gain on sale of properties (27,809,874)
Debt extinguishment expense 380,085
Depreciation of properties 1,056,973 1,273,190
Amortization of deferred
expenses 51,073 60,614
Net change in:
Escrow deposits 598,803 (167,852)
Accounts and accrued
interest receivable 288,617 (227,219) (76,372)
Prepaid expenses 95,080 (95,080)
Accounts payable (201,114) 86,991 2,922
Due to affiliates (51,244) 53,520 (81,987)
Accrued liabilities (516,588) 89,458
Security deposits (157,920) 13,471
------------- ------------- -------------
Net cash provided by
operating activities 58,936 208,685 471,358
------------- ------------- -------------
Investing activities:
Improvements to properties (118,050)
Proceeds from sale of
properties 51,585,000
Payment of selling costs (1,278,874)
------------- -------------
Net cash provided by or (used
in) investing activities 50,306,126 (118,050)
------------- -------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES - XII
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the years ended December 31, 1997, 1996 and 1995
(Continued)
1997 1996 1995
------------- ------------- -------------
Financing activities:
Distributions to Limited
Partners (18,081,284) (561,705)
Deemed distribution (514,243)
Proceeds from loan payable
- affiliate 195,000
Repayment of loan payable
- affiliate (705,724) (515,000)
Repayment of mortgage notes
payable (29,715,227)
Proceeds from the release of
capital improvement escrows 1,027,821 314,190
Principal payments on
mortgage notes payable (367,689) (404,943)
------------- ------------- -------------
Net cash used in financing
activities (18,081,284) (30,836,767) (410,753)
------------- ------------- -------------
Net change in cash and cash
equivalents (18,022,348) 19,678,044 (57,445)
Cash and cash equivalents at
beginning of year 19,824,096 146,052 203,497
------------- ------------- -------------
Cash and cash equivalents at
end of year $ 1,801,748 $ 19,824,096 $ 146,052
============= ============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES-XII
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Nature of the Partnership's Business:
Balcor Equity Properties-XII (the "Partnership") has retained cash reserves
from the sale of its real estate investments for contingencies which exist or
may arise. The Partnership's operations currently consist of interest income
earned on short-term investments and the payment of administrative expenses.
2. Partnership Termination:
The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. The Partnership sold all of its remaining properties in 1996. The
Partnership has retained a portion of the cash from the property sales to
satisfy obligations of the Partnership as well as establish a reserve for
contingencies. The timing of the termination of the Partnership and the final
distribution of cash will depend upon the nature and extent of liabilities and
contingencies which exist or may arise. Such contingencies may include legal
and other fees and costs stemming from litigation involving the Partnership,
including but not limited to, the lawsuits discussed in Note 12 of Notes to the
Financial Statements. Due to this litigation, the Partnership will not be
dissolved and the reserves will be held by the Partnership until the conclusion
of all contingencies. There can be no assurances as to the time frame for
conclusion of these contingencies.
3. Accounting Policies:
(a) The preparation of the financial statements in conformity with generally
accepted accounting principles requires the General Partner to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could vary from those estimates.
(b) Depreciation expense was computed using straight-line and accelerated
methods. Rates used in the determination of depreciation are based upon the
following estimated useful lives:
Buildings and improvements 22 to 30 years
Furniture and fixtures 5 years
Maintenance and repairs were charged to expense when incurred. Expenditures for
improvements were charged to the related asset account.
When properties were sold, the related costs and accumulated depreciation were
removed from the respective accounts. Any gain or loss on disposition was
recognized in accordance with generally accepted accounting principles.
(c) Effective January 1, 1995 the Partnership adopted Statement of Financial
Accounting Standards, No. 121 (SFAS 121), "Accounting for the Impairment of
<PAGE>
Long-Lived Assets and Long-Lived Assets to be Disposed Of". Under SFAS 121, the
Partnership recorded its investments in real estate at the lower of cost or
fair value, and periodically assessed, but not less than on an annual basis,
possible impairment to the value of its properties. The General Partner
estimated the fair value of its properties based on the current sales price
less estimated closing costs. Under SFAS 121, the General Partner determined
that no impairment in value had occurred prior to the sales of the properties.
The General Partner considered the method referred to above to result in a
reasonable measurement of a property's fair value, unless other factors
affecting the property's value indicated otherwise.
(d) Deferred expenses consisted of loan modification and refinancing fees which
were amortized over the terms of the respective agreements. Upon sale, any
remaining balance was recognized as debt extinguishment expense and classified
as an extraordinary item.
(e) The Financial Accounting Standard Board's Statement No. 107, "Disclosures
About Fair Value of Financial Instruments", requires disclosure of fair value
information about financial instruments for which it is practicable to estimate
that value. Statement No. 107 does not apply to all balance sheet items and
excludes certain financial instruments and all non-financial instruments such
as real estate and investment in joint ventures from its disclosure
requirements.
(f) For financial statement purposes, prior to 1996 partners were allocated
income and loss in accordance with the profit and loss percentages in the
Partnership Agreement. In order for the capital accounts of the General Partner
and Limited Partners to appropriately reflect their respective remaining
economic interests as provided for in the Partnership Agreement, income
allocations between the partners have been adjusted for financial statement
purposes in 1997 and 1996.
(g) Cash and cash equivalents include all unrestricted, highly liquid
investments with an original maturity of three months or less. Cash is held or
invested in one financial institution.
(h) The Partnership is not liable for Federal income taxes and each partner
recognizes his proportionate share of the Partnership loss or income in his tax
return; therefore, no provision for income taxes is made in the financial
statements of the Partnership.
(i) Revenue was recognized on an accrual basis in accordance with generally
accepted accounting principles.
(j) Statement of Financial Accounting Standards, No. 128, "Earnings per Share"
was adopted by the Partnership for the year-ended December 31, 1997 and has
been applied to all prior earnings periods presented in the financial
statements. Since the Partnership has no dilutive securities, there is no
difference between basic and diluted net income (loss) per Limited Partnership
Interest.
4. Partnership Agreement:
The Partnership was organized on December 23, 1981; however, operations did not
commence until 1982. The Partnership Agreement provides for Balcor Partners-XII
<PAGE>
to be the General Partner and for the admission of Limited Partners through the
sale of up to 40,000 Limited Partnership Interests at $1,000 per Interest,
37,447 of which were sold through November 30, 1982, the termination date of
the offering.
The Partnership Agreement provides that the General Partner will be allocated
1% of all profits and losses and the Limited Partners will be allocated 99% of
the profits and losses. For financial statement purposes, prior to 1996
partners were allocated income and loss in accordance with the provisions in
the Partnership Agreement. In order for the capital accounts of the General
Partner and Limited Partners to appropriately reflect their remaining economic
interests as provided for in the Partnership Agreement, income allocations
between the partners have been adjusted for financial statement purposes in
1996 and 1997.
The Partnership Agreement provides that one hundred percent of Net Cash
Receipts available for distribution shall be distributed to the holders of
Interests. However, there shall be accrued for the benefit of the General
Partner as its distributive share from operations an amount equivalent to 1% of
the total Net Cash Receipts being distributed, which will be paid only out of
Net Cash Proceeds.
The Partnership has sold all of its properties and all available Net Cash
Proceeds resulting therefrom have been distributed to Limited Partners. In
accordance with the Partnership Agreement, distributions are made only to
holders of Interests until such time as holders of Interests have received an
amount equal to their Original Capital plus certain levels of return. Only
after such returns are made to the Limited Partners would the General Partner
receive 20% of further distributed Net Cash Proceeds. The General Partner will
not receive any distributions of Net Cash Receipts or Net Cash Proceeds.
5. Mortgage Notes Payable:
All of the Partnership's remaining properties were sold during 1996, and any
outstanding loan balances were repaid from sale proceeds. See Note 9 of Notes
to Financial Statements for additional information.
During the years ended December 31, 1996 and 1995, the Partnership incurred
interest expense on mortgage notes payable of $2,424,115 and $2,880,912 and
paid interest of $2,436,502 and $2,880,912, respectively.
6. Management Agreements:
The Partnership's properties were under management agreements with a third
party management company prior to the sale of the properties. These management
agreements provided for annual fees of 5% of gross operating receipts.
7. Tax Accounting:
The Partnership keeps its books in accordance with the Internal Revenue Code,
rules and regulations promulgated thereunder, and existing interpretations
thereof. The accompanying financial statements, which are prepared in
accordance with generally accepted accounting principles, will differ from the
tax returns due to the different treatment of various items as specified in the
<PAGE>
Internal Revenue Code. The net effect of these accounting differences is that
the net income for 1997 in the financial statements is $7,033 higher than the
tax income of the Partnership for the same period.
8. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates are:
Year Ended Year Ended Year Ended
12/31/97 12/31/96 12/31/95
-------------- ---------------- --------------
Paid Payable Paid Payable Paid Payable
------ ------- ------ ------- ------ -------
Property management fees None None None None $39,770 None
Reimbursement of
expenses to the
General Partner, at
cost:
Accounting $17,030 $5,166 $12,544 $12,965 39,631 $2,604
Data processing 9,206 2,783 5,601 2,551 22,121 2,125
Investor communica-
tions None None None None 4,890 None
Legal 10,472 3,009 11,000 11,120 18,918 2,199
Portfolio management 35,584 11,041 37,725 37,601 84,874 11,399
Property sales admin-
istration 9,006 1,683 13,294 10,689 None None
Other None None None None 3,460 192
As of December 31, 1995, the General Partner loan had a balance of $705,724,
including accrued interest payable of $2,887. During 1995, the Partnership made
a net principal repayment of $320,000 on the General Partner loan and during
1996, the Partnership fully repaid the loan with proceeds from the sale of the
Brierwood Apartments. The Partnership incurred interest expense on the loan of
$21,152 in 1996 and $52,902 in 1995, and paid interest expense of $24,039 in
1996 and $59,159 in 1995. Interest expense on the General Partner loan was
computed at the American Express Company cost of funds rate plus a spread to
cover administrative costs. The interest rate was 5.931% at the date of the
loan repayment.
The Partnership participated in an insurance deductible program with other
affiliated partnerships in which the program paid claims up to the amount of
the deductible under the master insurance policies for its properties. The
program was administered by an affiliate of the General Partner (The Balcor
Company) who received no fee for administering the program; however, the
General Partner was reimbursed for program expenses. The Partnership paid
premiums to the deductible insurance program of $11,099 and $55,758 in 1996 and
1995, respectively.
9. Property Sales:
(a) In August 1996, the Partnership sold the Brierwood Apartments in an all
cash sale for $5,250,000. From the proceeds of the sale, the Partnership paid
<PAGE>
$3,749,391 to the third party mortgage holder in full satisfaction of the first
mortgage loan, and paid $80,625 in selling costs. The basis of the property was
$2,279,282, which is net of accumulated depreciation of $2,738,335. For
financial statement purposes, the Partnership recognized a gain of $2,890,093
from the sale of this property.
(b) In September 1996, the Partnership sold the Somerset Village Apartments in
an all cash sale for $11,100,000. From the proceeds of the sale, the
Partnership paid $6,321,474 to the third party mortgage holder in full
satisfaction of the first mortgage loan, and paid $304,215 in selling costs.
The basis of the property was $5,543,350, which is net of accumulated
depreciation of $5,165,140. For financial statement purposes, the Partnership
recognized a gain of $5,252,435 from the sale of this property.
(c) In November 1996, the Partnership sold the Cedar Ridge Apartments in an all
cash sale for $7,200,000. From the proceeds of the sale, the Partnership paid
$5,069,635 to the third party mortgage holder in full satisfaction of the first
and second mortgage loans, and paid $284,234 in selling costs and $151,993 in
prepayment penalties. The basis of the property was $4,346,679, which is net of
accumulated depreciation of $3,683,824. For financial statement purposes, the
Partnership recognized a gain of $2,569,087 from the sale of this property.
(d) In November 1996, the Partnership sold the Sandridge - Phase I Apartments
in an all cash sale for $8,250,000. From the proceeds of the sale, the
Partnership paid $5,829,712 to the third party mortgage holder in full
satisfaction of the first mortgage loan, and paid $232,575 in selling costs and
$141,832 in prepayment penalties. The basis of the property was $4,280,023,
which is net of accumulated depreciation of $3,769,504. For financial statement
purposes, the Partnership recognized a gain of $3,737,402 from the sale of this
property.
(e) In December 1996, the Partnership sold the DeFoors Creek Apartments in an
all cash sale for $19,850,000. The purchaser received a credit of $65,000
against the sale price relating to the property's vacancy factor. From the
proceeds of the sale, the Partnership paid $8,745,015 to the third party
mortgage holder in full satisfaction of the first and second mortgage loans and
paid $377,225 in selling costs and $428,589 in prepayment penalties. In
addition, the Partnership paid a state withholding tax of $514,243 on behalf of
the Limited Partners relating to the gain on the sale of the property which has
been recorded as a deemed distribution for financial statement purposes. The
basis of the property was $6,046,918, which is net of accumulated depreciation
of $5,683,021. For financial statement purposes, the Partnership recognized a
gain of $13,360,857 from the sale of this property.
10. Extraordinary Item:
In connection with the 1996 property sales, the Partnership paid $722,414 of
prepayment penalties and wrote off the remaining unamortized deferred expenses
in the amount of $380,085. These amounts were recognized as an extraordinary
item and classified as debt extinguishment expense. See Note 9 of Notes to
Financial Statements for additional information.
11. Fair Values of Financial Instruments:
The carrying amounts and fair values of the Partnership's financial instruments
<PAGE>
at December 31, 1997 and 1996 are as follows:
The carrying value of cash and cash equivalents, accounts and accrued interest
receivable and accounts payable approximates fair value.
12. Contingencies:
The Partnership is currently involved in two lawsuits whereby the Partnership
and certain affiliates have been named as defendants alleging substantially
similar claims involving certain state securities and common law violations
with regard to the property acquisition process of the Partnership, and to the
adequacy and accuracy of disclosures of information concerning, as well as
marketing efforts related to, the offering of the Limited Partnership Interests
of the Partnership. The defendants continue to vigorously contest these
actions. A plaintiff class has not been certified in either action and, no
determinations of the merits have been made. It is not determinable at this
time whether or not an unfavorable decision in either action would have a
material adverse impact on the financial position, operations and liquidity of
the Partnership. The Partnership believes it has meritorious defenses to
contest the claims.
13. Subsequent Event:
During January 1998, the Partnership made a distribution of $309,889 ($8.28 per
Interest) to Limited Partners from remaining available Net Cash Proceeds.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 1802
<SECURITIES> 0
<RECEIVABLES> 26
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1828
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1828
<CURRENT-LIABILITIES> 37
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1791
<TOTAL-LIABILITY-AND-EQUITY> 1828
<SALES> 0
<TOTAL-REVENUES> 316
<CGS> 0
<TOTAL-COSTS> 120
<OTHER-EXPENSES> 173
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 23
<INCOME-TAX> 0
<INCOME-CONTINUING> 23
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23
<EPS-PRIMARY> .61
<EPS-DILUTED> .61
</TABLE>
