FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 0-11766
ANGELES PARTNERS XI
(Exact name of small business issuer as specified in its charter)
California 95-3788040
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (803) 239-1000
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) ANGELES PARTNERS XI
CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
September 30, 1995
<S> <C> <C>
Assets
Cash:
Unrestricted $ 1,226,358
Restricted--tenant security deposits 508,747
Accounts receivable, net of an allowance
of $30,788 10,077
Escrows for taxes 136,715
Restricted escrows 75,000
Other assets 112,767
Investment in joint venture 181,935
Investment properties:
Land $ 3,998,115
Buildings and related personal 24,089,815
28,087,930
Less accumulated depreciation (13,916,985) 14,170,945
$ 16,422,544
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 256,514
Due to affiliates 317,474
Tenant security deposits 506,860
Accrued taxes 11,795
Other liabilities 685,139
Notes payable, including $178,423
in default 30,721,534
Partners' Deficit
General partners' $ (476,916)
Limited partners' (39,842 units
issued and outstanding) (15,599,856) (16,076,772)
$ 16,422,544
</TABLE>
[FN]
See Accompanying Notes to Consolidated Financial Statements
b) ANGELES PARTNERS XI
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Rental income $1,852,396 $2,488,142 $5,608,104 $ 7,457,771
Other income 102,362 142,707 268,736 408,488
Total revenues 1,954,758 2,630,849 5,876,840 7,866,259
Expenses:
Operating 466,522 697,560 1,458,368 2,179,966
General and administrative 49,391 47,000 189,353 235,971
Property management fees 94,321 131,826 283,812 389,048
Maintenance 223,697 287,936 573,419 769,366
Depreciation 409,460 529,651 1,216,037 1,587,081
Interest 849,164 1,179,860 2,540,538 3,581,437
Property taxes 204,004 229,352 563,099 675,631
Bad debt expense 30,788 -- 30,788 --
Total expenses 2,327,347 3,103,185 6,855,414 9,418,500
Loss before loss on disposal
of property, gain on sale
of investment property,
equity in income (loss)
of joint venture and
debt restructure fees (372,589) (472,336) (978,574) (1,552,241)
Loss on disposal of property -- (47,197) -- (47,197)
Gain on sale of investment
property 2,336,262 -- 2,336,262 --
Equity in income (loss) of
joint venture 39,620 24,391 (7,487) 31,793
Debt restructure costs (330,276) -- (330,276) --
Income (loss) before
extraordinary item 1,673,017 (495,142) 1,019,925 (1,567,645)
Extraordinary item-debt
forgiveness 220,594 -- 220,594 --
Net income (loss) $1,893,611 $ (495,142) $1,240,519 $(1,567,645)
Net income (loss) allocated to
general partners (1%) $ 18,936 $ (4,951) $ 12,405 $ (15,676)
Net income (loss) allocated to
limited partners (99%) 1,874,675 (490,191) 1,228,114 (1,551,969)
Net income (loss) $1,893,611 $ (495,142) $1,240,519 $(1,567,645)
Per limited partnership unit:
Income (loss) before
extraordinary item $ 41.57 $ (12.25) $ 25.34 $ (38.80)
Extraordinary item 5.48 -- 5.48 --
Net income (loss) $ 47.05 $ (12.25) $ 30.82 $ (38.80)
</TABLE>
[FN]
See Accompanying Notes to Consolidated Financial Statements
c) ANGELES PARTNERS XI
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 40,000 $ 30,000 $ 40,000,000 $ 40,030,000
Partners' deficit at
December 31, 1994 39,842 $(489,321) $(16,827,970) $(17,317,291)
Net loss for the nine months
ended September 30, 1995 -- 12,405 1,228,114 1,240,519
Partners' deficit at
September 30, 1995 39,842 $(476,916) $(15,599,856) $(16,076,772)
</TABLE>
[FN]
See Accompanying Notes to Consolidated Financial Statements
d) ANGELES PARTNERS XI
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $1,240,519 $(1,567,645)
Adjustments to reconcile net loss to cash
provided by operating activities:
Equity in loss (income) from joint venture 7,487 (31,793)
Depreciation 1,216,037 1,587,081
Amortization of loan costs and discounts 76,324 162,517
Bad debt expense 30,788 --
Loss on disposal of property -- 47,197
Gain on sale of investment property (2,336,262) --
Debt forgiveness (220,594) --
Change in accounts:
Restricted cash (13,331) 10,341
Accounts receivable (13,685) (3,936)
Escrows for taxes 88,873 73,012
Other assets (7,609) (37,332)
Accounts payable (371,687) (149,943)
Tenant security deposit liabilities (8,911) 15,894
Accrued taxes (61,854) (92,283)
Due to affiliates 45,166 158,209
Other liabilities 926,856 918,106
Net cash provided by operating activities 598,117 1,089,425
Cash flows from investing activities:
Proceeds from sale of investment property 4,716,872 --
Property improvements and replacements (1,095,560) (407,997)
Deposits to restricted escrows (615,000) --
Withdrawals from restricted escrows 540,000 --
Net cash provided by (used in)
investing activities 3,546,312 (407,997)
Cash flows from financing activities:
Additions to mortgage notes payable 33,600 --
Repayments of mortgage notes payable (3,986,937) --
Payments on mortgage notes payable (570,288) (350,297)
Net cash used in financing activities (4,523,625) (350,297)
(Decrease) increase in cash (379,196) 331,131
Cash at beginning of period 1,605,554 386,854
Cash at end of period $ 1,226,358 $ 717,985
Supplemental disclosure of cash flow information:
Cash paid during this period for interest $ 1,656,750 $ 2,608,745
Property improvements and replacements included
in accounts payable $ 57,145 $ --
Interest transferred to mortgage notes payable $ 1,880,009 $ --
</TABLE>
[FN]
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARTNERS XI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Going Concern
The Partnership continues to suffer from inadequate liquidity. In addition,
there are no identified capital resources available to the Partnership.
The Partnership is in default on $178,423 of its unsecured indebtedness due
to its inability to make interest and principal payments when due. The
Partnership is current on its first mortgage secured by the Fox Run property.
Until September 6, 1995, Harbour Landing Apartments was owned by Harbour Landing
AP XI L.P. ("Sub-tier Partnership") of which the Partnership is the 99.9%
limited partner. The Sub-tier Partnership was in default on the first and
second mortgages secured by the Harbour Landing property and filed for
bankruptcy protection and subsequently filed a plan of reorganization with the
bankruptcy court to avoid foreclosure by the lenders. During the second quarter
of 1995, the court approved the plan which gave the Sub-tier Partnership through
September 1995 to pay the debt secured by the property through a refinancing or
sale of the property. The plan provided that the lender could foreclose on the
property if the debt was not paid by September 1995. On September 6, 1995, the
Partnership sold the Harbour Landing property.
The second mortgages secured by Fox Run are held by Angeles Mortgage
Investment Trust ("AMIT"). The Managing General Partner has negotiated
amendments to these mortgages which now require interest only payments based on
an 8% pay rate with interest continuing to accrue at the original rate as per
the note agreement. The principal amount of this debt is due in September 1996
(see Note E for further discussion). The first mortgage on the Fox Run property
matures in July 1996. The Managing General Partner intends to refinance the
first and second mortgages prior to maturity, however, there is no assurance
that these negotiations will be successful.
As a result of the above conditions, there is substantial doubt about the
Partnership's ability to continue as a going concern. The financial statements
do not include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or amounts or classification of
liabilities that may result from the outcome of these uncertainties.
Note B - Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of the Managing General Partner, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the nine month
period ended September 30, 1995, are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 1995. For further
information, refer to the financial statements and footnotes thereto included in
the Partnership's annual report on Form 10-KSB for the fiscal year ended
December 31, 1994.
Certain reclassifications have been made to the 1994 information to conform
to the 1995 presentation.
Note C Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
Partnership activities. The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
The following expenses were paid or accrued to the Managing General Partner
and affiliates during the nine months ended September 30, 1995 and 1994:
1995 1994
Property management fees $283,812 $389,048
Reimbursement for services of affiliates,
(Total of $317,474 and $388,693 accrued at
September 30, 1995 and 1994, respectively) 101,190 158,210
Marketing services 851 8,199
The Partnership insures its properties under a master policy through an
agency and insurer unaffiliated with the Managing General Partner. An affiliate
of the Managing General Partner acquired, in the acquisition of a business,
certain financial obligations from an insurance agency which was later acquired
by the agent who placed the current year's master policy. The current agent
assumed the financial obligations to the affiliate of the Managing General
Partner, who receives payments on these obligations from the agent. The amount
of the Partnership's insurance premiums accruing to the benefit of the affiliate
of the Managing General Partner by virtue of the agent's obligations is not
significant.
Note C Transactions with Affiliated Parties (continued)
In November 1992, Angeles Acceptance Pool, L.P. ("AAP"), a Delaware limited
partnership was organized to acquire and hold the obligations evidencing the
working capital loan previously provided to the Partnership by Angeles Capital
Investments, Inc. ("ACII"). Angeles Corporation ("Angeles") is the 99% limited
partner of AAP. Angeles Acceptance Directives, Inc. ("AAD"), an affiliate of the
Managing General Partner, was, until April 14, 1995, the 1% General Partner of
AAP. On April 14, 1995, as part of a settlement of claims between affiliates of
the Managing General Partner and Angeles, AAD resigned as general partner of AAP
and simultaneously received a 1/2% limited partner interest in AAP. An
affiliate of Angeles now serves as the general partner of AAP.
This working capital loan funded the Partnership's operating deficits in
prior years. Total indebtedness, which is included as a note payable, was
$1,797,299 at September 30, 1995, and $2,761,717 at September 30, 1994, with
monthly interest only payments at prime. A principal payment of $770,078 was
made in December 1994 from the proceeds of the sale of Westmont Village
Apartments. A principal payment was also made in September 1995 in the amount
of $194,340 from the proceeds of the sale of Harbour Landing Apartments. The
remaining principal balance is to be paid the earlier of i) the availability of
funds, ii) the sale of the remaining property owned by the Partnership, or iii)
November 25, 1997. Total interest expense for this loan was $132,168 and
$143,264 for the nine months ended September 30, 1995 and 1994, respectively.
There was $14,522 in interest accrued at September 30, 1995.
AMIT currently provides secondary financing secured by the Partnership's
investment property, Fox Run Apartments. In addition, AMIT provides unsecured
financing to the Partnership. Total AMIT indebtedness included as a note
payable, was $6,942,032 at September 30, 1995. $178,423 of this indebtedness,
which is unsecured debt provided to the Partnership, was in default at September
30, 1995. Total interest expense on this financing was $508,328 and $667,625
for the nine months ended September 30, 1995 and 1994, respectively. Accrued
interest was $268,975 at September 30, 1995.
MAE GP Corporation ("MAE GP"), an affiliate of the Managing General Partner,
owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these
Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class
A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to
receive 1% of the distributions of net cash distributed to AMIT. These Class B
Shares also entitle MAE GP to vote on the same basis as Class A Shares which
allows MAE GP to vote approximately 37% of the total shares (unless and until
converted to Class A Shares at which time the percentage of the vote controlled
represented by the shares held by MAE GP would approximate 1% of the vote).
Between the date of acquisition of these shares (November 24, 1992) and March
31, 1995, MAE GP declined to vote these shares. Since that date, MAE GP voted
its shares at the 1995 annual meeting in connection with the election of
trustees and other matters. MAE GP has not exerted, and continues to decline
to exert, any management control over or participate in the management of AMIT.
As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT
an option to acquire the Class B Shares. This option can be exercised at the
end of 10 years or when all loans made by AMIT to partnerships affiliated with
MAE GP as of November 9, 1994, (which is the date of execution of a definitive
Settlement Agreement), have been paid in full, but in no event prior to November
9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at closing, which
occurred April 14, 1995, as payment for the option. Upon exercise of the
option, AMIT would remit to MAE GP an additional $94,000.
Simultaneously with the execution of the option, MAE GP executed an
irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to
vote the Class B Shares on all matters except those involving transactions
between AMIT and MAE GP affiliated borrowers or the election of any MAE GP
affiliate as an officer or trustee of AMIT. On those matters, MAE GP granted to
the AMIT trustees, in their capacity as trustees of AMIT, proxies with regard to
the Class B shares instructing such trustees to vote said Class B Shares in
accordance with the vote of the majority of the Class A Shares voting to be
determined without consideration of the votes of "Excess Class A Shares" as
defined in Section 6.13 of the Declaration of Trust of AMIT.
Note D - Investment in Joint Venture
The Partnership owns a 41.1% interest in Princeton Meadows Golf Course Joint
Venture ("Joint Venture"). AMIT currently provides financing on the Joint
Venture, secured by the investment property, in the amount of $1,320,419 which
is in default at September 30, 1995. (See PART II, ITEM 1. LEGAL PROCEEDINGS
for further discussion).
Condensed balance sheet information of the Joint Venture at September 30,
1995, is as follows:
Assets
Cash $ 276,240
Other assets 123,988
Investment properties, net 1,898,912
Total $2,299,140
Liabilities and Partners' Capital
Notes payable to AMIT, in default $1,320,419
Other liabilities 533,382
Partners' capital 445,339
Total $2,299,140
Note D - Investment in Joint Venture
The condensed statements of operations of the Joint Venture are summarized as
follows:
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
Revenue $ 501,362 $ 429,594 $ 985,090 $ 975,529
Costs and expenses (404,963) (370,247) (1,003,307) (898,174)
Net income (loss) $ 96,399 $ 59,347 $ (18,217) $ 77,355
The Princeton Meadows Golf Course property had an underground fuel storage
tank that was removed in 1992. This fuel storage tank caused contamination to
the area. Reports were filed with the proper authorities. Subsequent to
September 30, 1995, the State of New Jersey Department of Environmental
Protection issued a corrective actions letter to the Joint Venture. Based on
discussions with environmental engineers and others, the Managing General
Partner expects the remediation costs to be immaterial to the Partnership.
Note E - Debt Restructure Fees
Prior to the third quarter of 1995, the Partnership was in default on the
mortgage held by AMIT, which is secured by the Fox Run property, due to its
inability to make interest and principal payments when due. However, during the
third quarter of 1995, the Partnership was successful in negotiating amendments
to these mortgages effective September 1, 1995. As a result of the
modifications, $330,276 of debt restructure costs were incurred. The accrued
interest balance of $1,880,009 at August 31, 1995, was reclassed to the
principal balance of the mortgage pursuant to the agreement. The agreement also
requires interest only payments of $45,091 based on an 8% pay rate with interest
continuing to accrue at the original rate as per the original note agreement,
with the principal amount due in September 1996.
Note F - Sale of Investment Property
On September 6, 1995, the Managing General Partner sold the Harbour Landing
property to an unaffiliated third party. The total consideration paid to the
Partnership was $4,900,000. The total gain on the sale was $2,336,262. Also,
as a result of the sale $220,594 of debt was forgiven. The second mortgage
secured by Harbour Landing is held by AMIT and is still in default at September
30, 1995. Due to the sale of the property, this debt became unsecured debt of
the Partnership.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment property consists of one apartment complex. The
following table sets forth the average occupancy of the property for the nine
months ended September 30, 1995 and 1994:
Average
Occupancy
Property 1995 1994
Fox Run Apartments
Plainsboro, New Jersey 96% 95%
The Partnership realized net income of $1,893,611 and $1,240,519 for the
three and nine months ended September 30, 1995, respectively, versus net losses
of $495,142 and $1,567,645 for the three and nine months ended September 30,
1994, respectively. The increase in income during 1995 can primarily be
attributed to the gain on the sale of Harbour Landing Apartments, one of the
partnership's investment properties, during the third quarter of 1995 (See
discussion below).
Due to the sale of Westmont Village Apartments during the fourth quarter of
1994, and the sale of Harbour Landing Apartments during the third quarter of
1995, rental and other income decreased for the three and nine months ended
September 30, 1995, versus the three and nine months ended September 30, 1994.
Also contributing to the decrease in other income were decreases in corporate
units, deposit forfeitures, and laundry income at Fox Run Apartments. As a
result of the above mentioned sales, there was an overall decrease in the
following expenses for the three and nine months ended September 30, 1995, as
compared to the three and nine months ended September 30, 1994: operating,
property management fees, maintenance, depreciation, interest, and property tax
expense. Operating expenses also decreased due to decreased advertising and
utility expenses at Fox Run Apartments. General and administrative expenses
decreased for the nine months ended September 30, 1995, as compared to the nine
months ended September 30, 1994, due to decreased fee reimbursements for
partnership accounting, investor services and asset management services. A
decrease in snow removal expense at Fox Run Apartments also contributed to the
lower maintenance expense for the three and nine months ended September 30,
1995, as compared to the three and nine months ended September 30, 1994. The
bad debt expense in 1995 resulted from the reserve established on accounts
receivable from tenants of the Harbour Landing Apartments that were considered
uncollectible following the sale of the property.
During the third quarter of 1994, the Partnership realized a loss on disposal
of property of $47,197. The loss was due to a re-roofing project at Fox Run
Apartments, resulting in the write off of the original roofs not yet fully
depreciated.
Prior to September 6, 1995, Harbour Landing Apartments was owned by Harbour
Landing AP XI L.P. ("Sub-tier Partnership") of which the Partnership is the
99.9% limited partner. The Sub-tier Partnership was in default on the first and
second mortgages secured by the Harbour Landing property and filed for
bankruptcy protection and subsequently filed a plan of reorganization with the
bankruptcy court to avoid foreclosure by the lenders. During the second quarter
of 1995, the court approved the plan which gave the Sub-tier Partnership through
September 1995 to pay the debt secured by the property through a refinancing or
sale of the property. The plan provided that the lender could foreclose on the
property if the debt was not paid by September 1995; however, on September 6,
1995, the Managing General Partner sold the property to an unaffiliated third
party. The total consideration paid to the Partnership was $4,900,000. The
total gain on the sale was $2,336,262. Also, as a result of the sale $220,594
of debt was forgiven. The second mortgage secured by Harbour Landing is held by
AMIT and is still in default at September 30, 1995. Due to the sale of the
property, this debt became unsecured debt of the Partnership.
The Partnership has a 41.1% investment in the Princeton Meadows Golf Course
Joint Venture. For the three and nine months ended September 30, 1995, the
Partnership realized equity in income and equity in loss of the Joint Venture of
$39,620 and $7,487, respectively, as compared to an equity in income of the
Joint Venture of $24,391 and $31,793 for the three and nine months ended
September 30, 1994, respectively (See Note C - Investment in Joint Venture).
The loss for the nine months ended September 30, 1995, can be attributed to bad
debt expense recorded during the year due to the reserve for uncollectible
receivables.
Prior to the third quarter of 1995, the Partnership was in default on the
mortgage held by AMIT, which is secured by the Fox Run property, due to its
inability to make interest and principal payments when due. However, during the
third quarter of 1995, the Partnership was successful in negotiating amendments
to these mortgages effective September 1, 1995. As a result of the
modifications, $330,276 of debt restructure costs were incurred. The accrued
interest balance of $1,880,009 at August 31, 1995, was reclassed to the
principal balance of the mortgage pursuant to the agreement. The agreement also
requires interest only payments of $45,091 based on an 8% pay rate with interest
continuing to accrue at the original rate as per the original note agreement,
with the principal amount due in September 1996.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of its investment property to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expense. As part of
this plan, the Managing General Partner attempts to protect the Partnership from
the burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
Managing General Partner will be able to sustain such a plan.
At September 30, 1995, the Partnership had unrestricted cash of $1,226,358 as
compared to $717,985 at September 30, 1994. Net cash provided by operating
activities decreased primarily due to a decrease in accounts payable. Net cash
from investing activities increased due to the proceeds received from the sale
of Harbour Landing Apartments. Net cash used in financing activities increased
due to the repayments on the mortgage notes payable due to the sale of Harbour
Landing Apartments.
The sufficiency of existing liquid assets to meet future liquidity and
capital expenditure requirements is directly related to the level of capital
expenditures required at the investment property to adequately maintain the
physical assets and other operating needs of the Partnership. The mortgage
indebtedness of $30,721,534, of which $178,423 is in default, is amortized over
30 years and includes interest only payments with maturity dates of July 1996,
September 1996, and November 1997, at which time the property will either be
refinanced or sold. Future cash distributions will depend on the levels of net
cash generated from operations, property sales, and the availability of cash
reserves. There were no cash distributions made during the first nine months of
1995.
As a result of the above conditions, there is substantial doubt about the
Partnership's ability to continue as a going concern. The financial statements
do not include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or amounts or classification of
liabilities that may result from the outcome of these uncertainties.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
AMIT, a real estate investment trust, made loans to the Partnership in June
1988, September 1992 and September 1992 in the amounts of $1,250,000, $2,000,000
and $1,600,000, respectively, secured by the Partnership's real property known
as Fox Run Apartments. AMIT also made a loan to the Joint Venture in September
1991 in the amount of $1,280,000 secured by the Joint Venture's real property
known as Princeton Meadows Golf Course. Due to default interest and late fees
that are delinquent and have been added to the principal balance, the current
balance of the debt secured by Princeton Meadows Golf Course is $1,320,419. The
Partnership believed that the loans were non-recourse obligations. AMIT
asserted that these loans were recourse by virtue of certain amendments
purportedly entered into as of November 1, 1992, but which the Partnership has
been informed and believes were actually executed in December 1992 ("Note
Modifications"). The Partnership has been further informed and believes that
the amendments were executed at the direction of Angeles by an individual in his
purported capacity as an officer of the Managing General Partner of the
Partnership and the Joint Venture at a time when such person was not in fact an
officer of such entities. Accordingly, the Partnership and the Joint Venture
filed Proofs of Claim in the Angeles bankruptcy proceeding with respect to such
purported amendments. Additionally, the Partnership and the Joint Venture filed
a Proof of Claim in the Angeles Funding Corporation and Angeles Real Estate
Corporation bankruptcy proceedings on similar grounds. Both Angeles Funding
Corporation and Angeles Real Estate Corporation are affiliates of Angeles.
Subsequently, the Partnership has determined that the original note agreements
evidencing the $1,250,000 and $1,600,000 obligations were recourse and,
therefore, the Partnership's Proofs of Claim were withdrawn. In addition,
Angeles has agreed to cooperate with the Partnership and the Joint Venture in
any action commenced by or against them by AMIT asserting that the $2,000,000
and the $1,280,000 obligations owed to AMIT are recourse to the Partnership.
Angeles further agreed to waive the attorney-client privilege with respect to
any information relating to the Note Modifications. Accordingly, the
Partnership and the Joint Venture withdrew their Proofs of Claim on August 9,
1995.
MAE GP Corporation ("MAE GP"), an affiliate of the Managing General Partner,
owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these
Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class
A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to
receive 1% of the distribution of net cash distributed by AMIT. These Class B
Shares also entitle MAE GP to vote on the same basis as Class A Shares which
allows MAE GP to vote approximately 37% of the total shares (unless and until
converted to Class A Shares at which time the percentage of the vote controlled
represented by the shares held by MAE GP would approximate 1% of the vote).
Between the date of acquisition of these shares (November 24, 1992) and March
31, 1995, MAE GP declined to vote these shares. Since that date, MAE GP voted
its shares at the 1995 annual meeting in connection with the election of
trustees and other matters. MAE GP has not exerted, and continues to decline to
exert, any management control over or participate in the management of AMIT.
MAE GP may choose to vote these shares as it deems appropriate in the future.
As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT
an option to acquire the Class B Shares. This option can be exercised at the
end of 10 years or when all loans made by AMIT to partnerships affiliated with
MAE GP as of November 9, 1994, (which is the date of execution of a definitive
Settlement Agreement), have been paid in full, but in no event prior to November
9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at closing, which
occurred April 14, 1995, as payment for the option. Upon exercise of the
option, AMIT would remit to MAE GP an additional $94,000.
Simultaneously with the execution of the option, MAE GP executed an
irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to
vote the Class B Shares on all matters except those involving transactions
between AMIT and MAE GP affiliated borrowers or the election of any MAE GP
affiliate as an officer or trustee of AMIT. On those matters, MAE GP granted to
the AMIT trustees, in their capacity as trustees of AMIT, proxies with regard to
the Class B Shares instructing such trustees to vote said Class B Shares in
accordance with the vote of the majority of the Class A Shares voting to be
determined without consideration of the votes of "Excess Class A Shares" as
defined in Section 6.13 of the Declaration of Trust of AMIT.
The Registrant is unaware of any other pending or outstanding litigation that
is not of a routine nature. The Managing General Partner of the Registrant
believes that all such pending or outstanding litigation will be resolved
without a material adverse effect upon the business, financial condition, or
operations of the Partnership.
ITEM 2. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
10.11 Contract to Purchase and Sell Property with Exhibits dated July
24, 1995, between Harbour Landing AP XI, L.P., a South Carolina
limited partnership, and New Plan Realty Trust, a Massachusetts
Business Trust.
10.12 Special Warranty Deed dated September 5, 1995, between Harbour
Landing AP XI, L.P., and New Plan Realty Trust.
10.13 Comfort Sum Escrow Agreement dated September 6, 1995, between
New Plan Realty Trust, Harbour Landing AP XI, L.P., and Coastal
Abstract Service, Inc.
10.14 Blanket Conveyance, Bill of Sale and Assignment between Harbour
Landing AP XI, L.P., and New Plan Realty Trust.
10.15 Non-Warranty Deed between Harbour Landing AP XI, L.P., and New
Plan Realty Trust.
10.16 Assignment and Assumption of Leases dated September 5, 1995,
between Harbour Landing, AP XI, L.P., and New Plan Realty
Trust.
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
b) Reports on Form 8-K:
A Form 8-K dated September 6, 1995 was filed reporting the sale
of Harbour Landing Apartments located at 7625 Garner's Ferry
Road in Columbia, South Carolina.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ANGELES PARTNERS XI
By: Angeles Realty Corporation II
Managing General Partner
By: /s/Carroll D. Vinson
Carroll D. Vinson
President and Principal
Executive Officer
By: /s/Robert D. Long, Jr.
Robert D. Long, Jr.
Controller and Principal
Accounting Officer
Date: November 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners XI 1995 Third Quarter 10-QSB and is qualified in its entirety by
reference to such 10-QSB.
</LEGEND>
<CIK> 0000702986
<NAME> ANGELES PARTNERS XI
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,226,358
<SECURITIES> 0
<RECEIVABLES> 10,077
<ALLOWANCES> 30,788
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 28,087,930
<DEPRECIATION> 13,916,985
<TOTAL-ASSETS> 16,422,544
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 30,721,534
<COMMON> 0
0
0
<OTHER-SE> (16,076,772)
<TOTAL-LIABILITY-AND-EQUITY> 16,422,544
<SALES> 0
<TOTAL-REVENUES> 5,876,840
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,855,414
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,540,538
<INCOME-PRETAX> 1,240,519
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,240,519
<DISCONTINUED> 0
<EXTRAORDINARY> 220,594
<CHANGES> 0
<NET-INCOME> 1,240,519
<EPS-PRIMARY> 30.82
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
</FN>
</TABLE>
