SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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FORM 10-Q
[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
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No.: 0-13526
SIERRA REAL ESTATE EQUITY TRUST '84 CO.
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(Exact name of registrant as specified in its charter)
Missouri 94-3059972
(State or other jurisdiction of (I.R.S. Employer I.D. Number)
incorporation or organization)
50 California Street, Suite 1600, San Francisco, California 94111
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(Address and zip code of principal executive offices)
Registrant's telephone number, including area code: (415) 956-3031
NONE
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(Former name, address, and former fiscal year, if changed since last report)
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 the number of shares outstanding of the common stock, as of the
latest practicable date:
Shares of Common Stock outstanding as of November 1, 1995: 4,887,089
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<PAGE>
PART I: FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
The accompanying unaudited financial statements should be read in
conjunction with the 1994 Form 10-K of the registrant (the "Company"). These
statements have been prepared in accordance with the instructions of the
Securities and Exchange Commission Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
In the opinion of the Company's management, all normal and recurring
adjustments considered necessary for a fair presentation have been included. The
changes in Estimated Net Assets in Liquidation for the nine months ended
September 30, 1995 are not necessarily indicative of the change that may be
expected for the year ending December 31, 1995.
<PAGE>
SIERRA REAL ESTATE EQUITY TRUST `84 CO.
(Liquidation Basis)
STATEMENT OF ESTIMATED NET ASSETS IN LIQUIDATION
SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
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<S> <C> <C>
Assets
Cash and Cash Equivalents $584,214 $663,279
Notes Receivable From Affiliates 144,000 144,000
Other Assets -- 3,844
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Total Assets 728,214 811,123
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Liabilities
Accounts Payable -- 163,302
Due To (From) Affiliates 1,075 (4,530)
Accrued Liquidation Costs 378,648 391,000
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Total Liabilities 379,723 549,772
==================================================================================
Estimated Net Assets in Liquidation $348,491 $261,351
==================================================================================
Shares of Beneficial Interest Issued and $4,887,089 $4,887,089
Outstanding
==================================================================================
Estimated Net Assets in Liquidation Per Share $ 0.071 $ 0.053
of Common Stock
==================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
SIERRA REAL ESTATE EQUITY TRUST `84 CO.
(Liquidation Basis)
STATEMENT OF CHANGES IN ESTIMATED NET ASSETS IN LIQUIDATION
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND
THE YEAR ENDED DECEMBER 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
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<S> <C>
Total Shareholders' Equity at January 1, 1994 $1,389,743
Adjustment to Reflect Change to Liquidation Basis --
of Accounting
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Estimated Net Assets in Liquidation at January 1, 1,389,743
1994
Interest and Other Income 103,437
Legal Costs (194,691)
Directors & Officers Insurance (115,467)
General and Administrative Expenses (119,883)
Depreciation and Amortization (10,788)
Legal Settlement (400,000)
Estimated Costs to Liquidate the Company (391,000)
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Estimated Net Assets in Liquidation at December 261,351
31, 1994
Adjustment of Estimated Costs to Liquidate the 87,140
Company
====================================================================================
Estimated Net Assets in Liquidation at September $348,491
30, 1995
====================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
SIERRA REAL ESTATE EQUITY TRUST '84 CO.
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
1. General.
Sierra Real Estate Equity Trust '84 Co. (the "Company") was organized for
the purpose of acquiring, operating, holding for investment and ultimately
selling income-producing commercial and industrial real estate. The Company is a
self-liquidating/finite life entity in its liquidation phase.
On December 22, 1993, the Company sold its three remaining real estate
investments namely, Beach Commerce Center, Fairway Commerce Center, and Westlake
Commerce Center. At September 30, 1995, the Company's remaining assets consist
primarily of cash and cash equivalents and notes receivable from affiliates. On
May 4, 1995, the Company's shareholders approved the adoption of a formal Plan
of Dissolution and Complete Liquidation for the Company (the "Plan").
Under Missouri law, the Company may not terminate its existence for two
years after it is dissolved. Therefore, the Company has accrued for all its
known liabilities and obligations, including contractual arrangements for
certain legal, accounting, and administrative services to be performed by
unaffiliated third parties during the above-referenced two-year period. During
this two-year period, the Company's activities will be confined to completing
the steps necessary to formally terminate its existence under state law. The
Company expects to pay a liquidating dividend in the amount of the balance of
its funds (estimated to be 7.1 cents per share, subject to any final adjustments
to the accrued liquidation costs prior to the distribution). This dividend is
expected to be paid in December 1995. Upon payment of this dividend, the
administration of the Company's affairs will be transferred to a third-party
administrator. No further distributions to shareholders are expected to be made
after this dividend. The payment of this dividend is contingent upon receipt of
a formal SEC no-action letter exempting the Company from the need to file
further reports under the Securities Exchange Act of 1934, as amended. Although
the Company expects to receive this letter, there can be no assurance that this
letter will be received or that this dividend will be paid. It is intended that
there will be no further shareholder meetings in order to minimize the
associated legal, accounting and other expenses.
2. Basis of Presentation.
As a result of the anticipated liquidation and in accordance with
generally accepted accounting principles, the Statement of Estimated Net Assets
in Liquidation at September 30, 1995 and December 31, 1994 and the Statement of
Changes in Estimated Net Assets in Liquidation for the nine months ended
September 30, 1995 and for the year ended December 31, 1994 are presented on the
liquidation basis. The liquidation basis of accounting requires that the
Company's remaining assets be presented at their estimated realizable value and
the remaining liabilities, including a provision for the estimated costs of the
Plan, be presented at their estimated settlement value.
The estimated costs of the Plan represent future general and
administrative costs anticipated to carry out the final liquidation. Such costs
are reflected as accrued liquidation costs in the accompanying Statement of
Estimated Net Assets in Liquidation and amount to $378,648 and $391,000 at
September 30, 1995 and December 31, 1994, respectively. These accrued
liquidation costs may change if the above-referenced SEC approval is not
forthcoming.
3. Cash and Cash Equivalents.
The Company considers all investments with a maturity of three months or
less to be cash equivalents.
4. Income Taxes.
At December 31, 1993, the Company ceased to qualify as a REIT because it
no longer held any real estate assets that would generate the real estate income
necessary to qualify as a REIT for federal income tax purposes. To facilitate
its future liquidation, the majority of the Company's assets are held in the
form of cash and cash equivalents. The Company does not anticipate taxable
income for the year ended December 31, 1995, and has significant net operating
and capital loss carryforwards. Therefore, the loss of the REIT status should
have no tax impact to the Company or shareholders, and no provision for federal
income taxes has been made in the accompanying statement of changes in estimated
net assets in liquidation for the nine months ended September 30, 1995 and the
year ended December 31, 1994.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company disposed of all its real estate assets and has adopted a plan
of liquidation (the "Plan").
Under the liquidation basis accounting, a Statement of Estimated Net
Assets in Liquidation is presented in lieu of a balance sheet. In the Statement
of Estimated Net Assets in Liquidation, remaining assets are stated at their
estimated realizable values, and remaining liabilities, including a provision
for the estimated costs of the Plan, are stated at their estimated settlement
amounts. A Statement of Changes in Estimated Net Assets in Liquidation has also
been included in lieu of a Statement of Operations. (See Note 1 to the financial
statements of the Company.)
This section should be read in conjunction with the financial statements
and related footnotes contained in Item 1 of this report. Unless otherwise
defined in this report, or unless the context otherwise requires, the
capitalized words or phrases referred to in this section either: (a) describe
accounting terms that are used as line items in those financial statements, or
(b) have the meanings ascribed to them in those financial statements and the
notes thereto.
Liquidity and Capital Resources.
At September 30, 1995 the Company had cash and cash equivalents of
$584,214. Before payment of its final liquidating dividend, the Company expects
to receive payment of its $144,000 notes receivable from affiliates. At
September 30, 1995, the Company's total liabilities amount to $379,723. Thus, at
September 30, 1995, the Company's estimated net assets in liquidation amount to
$348,491, which are expected to be distributed in a liquidating dividend of 7.1
cents per share, subject to any final adjustments to the accrued liquidation
costs prior to the distribution.
During the nine months ended September 30, 1995, the costs estimated to
liquidate the Company were adjusted by $87,140. The adjustment was due to the
changes in the assumptions and costs estimated to be incurred in the
consummation of the Plan.
Under Missouri law, the Company may not terminate its existence for two
years after it is dissolved. Therefore, the Company has accrued for all its
known liabilities and obligations, including contractual arrangements for
certain legal, accounting, and administrative services to be performed by
unaffiliated third parties during the above-referenced two-year period. During
this two-year period, the Company's activities will be confined to completing
the steps necessary to formally terminate its existence under state law. The
Company expects to pay a liquidating dividend in the amount of the balance of
its funds (estimated to be 7.1 cents per share, subject to any final adjustments
to the accrued liquidation costs prior to the distribution). This dividend is
expected to be paid in December 1995. Upon payment of this dividend, the
administration of the Company's affairs will be transferred to a third-party
administrator. No further distributions to shareholders are expected to be made
after this dividend. The payment of this dividend is contingent upon receipt of
a formal SEC no-action letter exempting the Company from the need to file
further reports under the Securities Exchange Act of 1934, as amended. Although
the Company expects to receive this letter, there can be no assurance that this
letter will be received or that this dividend will be paid. It is intended that
there will be no further shareholder meetings in order to minimize the
associated legal, accounting and other expenses.
The estimated costs of the Plan represent future general and
administrative costs anticipated to carry out the final liquidation. Such costs
are reflected as accrued liquidation costs in the accompanying Statement of
Estimated Net Assets in Liquidation and amount to $378,648 and $391,000 at
September 30, 1995 and December 31, 1994, respectively. These accrued
liquidation costs may change if the above-referenced SEC approval is not
forthcoming.
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<PAGE>
PART II: OTHER INFORMATION
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ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the Company or
any partnership in which it has an interest is a party, or to which any of
the assets of the Company or any such partnership are subject.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits: None.
(b) Reports on Form 8-K. No reports on Form 8-K report were
filed during the quarter ended September 30, 1995:
None.
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
REGISTRANT
SIERRA REAL ESTATE EQUITY TRUST '84 CO.
Date: November 9, 1995 By: Milton K. Reeder
-------------------------------------
Milton K. Reeder,
President and Chief Executive Officer
(Principal Executive Officer)
Date: November 9, 1995 By: Brian F. Zywiciel
-------------------------------------
Brian F. Zywiciel,
Senior Vice President,
Chief Financial Officer,
and Treasurer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 584,214
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 144,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 728,214
<CURRENT-LIABILITIES> 379,723
<BONDS> 0
<COMMON> 4,887,089
0
0
<OTHER-SE> (4,538,598)
<TOTAL-LIABILITY-AND-EQUITY> 728,214
<SALES> 0
<TOTAL-REVENUES> 87,140
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 87,140
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
