SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d)
of Securities Exchange Act of 1934
Commission File
For the fiscal year ended December 31, 1996 Number 0-13441
ONE FINANCIAL PLACE LIMITED PARTNERSHIP
(Exact name of small business issuer as specified in its charter)
Illinois 04-2807084
(State of other jurisdiction of (I.R.S. Employee
incorporation or organization) Identification Number)
One International Place, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone no., including area code: (617) 330-8600
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
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-B 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-KSB or any amendment to
this Form 10-KSB. [ ]
The Registrant had no revenues for its most recent fiscal year.
No market exists for the limited partnership interests of the Registrant, and,
therefore, a market value for such interests cannot be determined.
DOCUMENTS INCORPORATED BY REFERENCE
Location in Form 10-KSB Document
In Which Document is
Incorporated
Part I The Confidential Memorandum
filed as Exhibit 28 to the
Registrant's Registration
Statement on Form 10 filed on
August 29, 1985 (the
"Confidential Memorandum").
Registrant's Explanatory
Statement dated January 15,
1988 and filed as Exhibit
28(i) to the Registrant's
Annual Report on Form 10-KSB
for the year ended December
31, 1987 and filed on August
22, 1989.
Pages 4-5 of the Registrant's
Annual Report on Form 10-KSB
for the year ended December
31, 1987 and filed on August
22, 1989.
Registrant's "Investor
Partnership's Report" filed
under Registrant's Current
Report on Form 8-K for the
period ending January 19,
1995 and filed on February 2,
1995.
Transitional Small Business Disclosure Format: Yes ___ No X
PART I
Item 1. Description of Business.
Organization
One Financial Place Limited Partnership (the "Registrant") was
organized under the Uniform Limited Partnership Act of the State of Illinois as
of November 1, 1983, for the purpose of becoming a general partner of One
Financial Place Partnership, an Illinois general partnership (the "Operating
Partnership"), which owned and operated a 39-story office building and a
three-story trading annex located at 440 South LaSalle Street, Chicago, Illinois
(the "Property"). The general partners of the Registrant are Winthrop Financial
Co., Inc. ("Winthrop" or the "Managing General Partner"), Winthrop Interim
Partners I, a Limited Partnership ("WIPI") and Linnaeus-Phoenix Associates
Limited Partnership ("Linnaeus") (collectively, the "General Partners").
The Registrant's only business is investing in and acting as a general
partner of the Operating Partnership. The Operating Partnership's only business
was to own and operate the Property. The general partners of the Operating
Partnership were, until the Effective Date of the Plan (as discussed below) (i)
Casati-Heise Partnership ("Casati-Heise"), an Illinois general partnership which
acted as the managing general partner for the purpose of handling the day to day
business of the Operating Partnership, (ii) Option Center, Ltd. ("Option
Center"), an Illinois corporation, (iii) MSE Real Estate Investments, Inc.
("MSE"), an Illinois corporation, and (iv) the Registrant. Casati-Heise, Option
Center and MSE, collectively, are hereinafter referred to as the "Development
Partners".
The Registrant acquired its interest in the Operating Partnership in
exchange for a capital contribution in the amount of $47,900,000, payable in
installments. As of March 1986, the entire capital contribution had been paid.
The terms of the Registrant's investment in the Operating Partnership and the
terms of the partnership agreement of the Operating Partnership are described on
pages 51-56 of the Confidential Memorandum filed as Exhibit 28 to the
Registrant's Registration Statement filed on Form 10 on April 27, 1985, as
amended by Amendment No. 1 thereto filed on Form 8 on August 29, 1985 (the
"Confidential
<PAGE>
Memorandum"), which description is incorporated herein by this reference, except
as follows:
As discussed below, on November 28, 1994, the Registrant's limited
partnership agreement was amended and on November 29, 1994 an involuntary
petition under chapter 11 of the United States Bankruptcy Code was filed with
respect to the Operating Partnership and the Operating Partnership also filed
its plan of reorganization. On January 31, 1995 the Operating Partnership's plan
of reorganization became effective, which plan modified the terms of the
Operating Partnership's general partnership agreement and the terms of all the
secured indebtedness of the Operating Partnership and eliminated all existing
defaults under such debt. The Operating Partnership's plan of reorganization is
described on pages 2-3 of the "Investor Partnership's Report" on Form 8-K for
the period ending January 19, 1995 which was filed on February 2, 1995 and which
description is incorporated herein by reference.
The Registrant was initially capitalized with contributions totaling
$202,100 from the General Partners and the Special Limited Partner. On June 30,
1984, the Registrant completed an offering of 550 units of limited partnership
interest ("Units") in the Registrant to limited partners ("Limited Partners"),
raising capital contributions of $90,285,800, payable in installments pursuant
to the terms of promissory notes ("LP Notes"). As of January 15, 1988, the
Limited Partners' capital contributions had been paid in full. The offering of
Units was made pursuant to a Confidential Memorandum dated February 20, 1984
(the "Confidential Memorandum") in reliance on Regulation D promulgated under
the Securities Act of 1933.
The Operating Partnership originally obtained a $153,700,000 first
mortgage loan (the "First Travelers Loan") from The Travelers Insurance Company
("Travelers") and a $4,000,000 second mortgage loan from the City of Chicago,
funded by a grant from the United States Department of Housing and Urban
Development (the "UDAG Loan"). On July 8, 1987, the Operating Partnership
borrowed an additional $20,000,000.00 from Travelers (the "Subordinate Travelers
Loan") (the "First Travelers Loan" and the "Subordinate Travelers Loan" are
collectively referred to as the "Travelers Loan") and in connection therewith
granted a subordinate mortgage note to Travelers. In addition, during 1987 the
Operating Partnership obtained a line of credit from the Northern Trust Company
(the "Northern Trust Loan"). The original
<PAGE>
commitment amount was $3,000,000.00 which was increased to $4,000,000.00 in 1989
and to $6,500,000.00 in 1991. As of December 31, 1996, the outstanding balance
of the Northern Trust Loan was $2,800,000.
As a result of a depressed real estate market in the Chicago area and
below market rental rates at the Property, the Operating Partnership defaulted
on the Travelers Loan and the UDAG Loan. After a series of negotiations during
the early 1990's, on July 27, 1994, the Operating Partnership and certain of its
general partners reached an "Agreement Regarding Contemplated Restructuring and
Certain Documents Related Thereto" with Travelers, which provided, among other
things, that Travelers would defer a portion of the Operating Partnership's debt
service, extend the maturity date of the Travelers Loan to October 1, 1998, and
not require any contribution of funds related to the restructuring, except by
the Development Partners. In exchange for these concessions, the Operating
Partnership agreed to give Travelers greater control over the Property and its
operations. Travelers, the Operating Partnership and certain of the general
partners (including the Registrant) also agreed to consummate the restructuring
by obtaining the bankruptcy court's approval of the Operating Partnership's plan
of reorganization to be entered with the court, which also provided for the
restructuring of the Operating Partnership's other debt. The proposed
restructure was subject to various approvals, including the approval of the City
of Chicago, the Northern Trust Company and the Limited Partners.
Such approvals were obtained and on November 29, 1994, an involuntary
petition under chapter 11 was filed with respect to the Operating Partnership in
the United States Bankruptcy Court for the Northern District of Illinois,
Eastern Division (the "Court"), Case No. 94 B 23642. On December 1, 1994 an
Order of Relief was entered whereby the Court assumed jurisdiction over the
action.
At the same time, Limited Partners also approved an amendment to the
Registrant's partnership agreement (the "Amendment"), which amendment was
required to facilitate the agreements reached between Travelers, the Operating
Partnership and the partners thereof.
On January 31, 1995 (the "Effective Date"), a Plan of Reorganization
for the Operating Partnership (the "Plan") became
<PAGE>
effective pursuant to an Order Confirming Plan of Reorganization for One
Financial Place Partnership entered January 19, 1995, by the United States
Bankruptcy Court for the Northern District of Illinois, Eastern Division in Case
No. 94B23642.
The Plan modifies the terms of the Travelers Loan, the UDAG Loan and
the Northern Trust Loan (collectively, the "Loans"), and on the Effective Date
eliminated all existing defaults under the
Loans. Under the Plan, Travelers agreed to (i) defer collection of an aggregate
amount of approximately $16,800,000 through June 1994 (which consisted of funds
previously advanced by Travelers for the payment of real estate taxes and debt
service previously deferred), (ii) reduce current debt service by an aggregate
amount of approximately $16,800,000 thereafter, (iii) extend the maturity date
of the Travelers Loan by three years to October 1, 1998 with reduced current
debt service through such date and (iv) not require the Operating Partnership to
contribute any additional funds. In exchange for these concessions, the
Operating Partnership gave Travelers greater control over the Property and its
operations by (a) agreeing that any positive cash flow after the payment of debt
service will be deposited into a reserve held by Travelers, which cannot be
distributed to the Operating Partnership and can only be used to fund any cash
flow deficits of the Property, (b) expanding the events of default under the
Travelers Loan documents, (c) agreeing that Travelers would have approval rights
with respect to property budgets, leasing and capital improvements, (d) agreeing
to defer and subordinate 75% of the Development Partners' management fees to pay
certain expenses and to pay the debt service under the UDAG Loan and the
Northern Trust Loan, (e) agreeing to pay other possible costs by the Development
Partners, and (f) agreeing that the Operating Partnership would only have the
right to receive cash proceeds upon a sale or refinancing of the Property after
repayment of the Loans.
In addition, the Plan required Winthrop Financial Associates, A Limited
Partnership ("WFA"), the sole shareholder of the sole shareholder of Winthrop,
the Development Partners and certain of their affiliates to execute various
guarantees of a portion of the Travelers Loan, which guaranties are intended to
prevent the General Partners, Development Partners and their affiliates from
taking any action or permitting the Operating Partnership, the Registrant or
other affiliates to take any action, to prevent Travelers from taking ownership
of the Property in the event of a default.
<PAGE>
Further, under the Plan, each of the Registrant, the Development
Partners and MSE received interests in Financial Place 1994 Limited Partnership,
an Illinois limited partnership ("New LP") and received shares in OFP
Corporation, an Illinois corporation ("Newco") in place of their prior
partnership interest in the Operating Partnership and Newco and New LP became
the sole general partners of the reconstituted Operating Partnership with Newco
acting as managing general partner. Newco will also serve as the managing
general partner of New LP and the business and affairs of Newco shall be managed
directly by the Registrant and the Development Partners, the shareholders of
Newco. The provisions regarding Major Decisions (which are defined in the
Articles of Shareholders of Newco (the "Newco Articles") as those basic business
judgments which establish the economic parameters of the operation of the
business of Newco, New LP and the Operating Partnership) are substantially
similar to those contained in the prior partnership agreement of the Operating
Partnership except that a decision to file a bankruptcy case against Newco, New
LP or the Operating Partnership is defined as a Major Decision in the Newco
Articles, requiring the consent of 100% of the shareholders. The Plan also
provided any prior general partner of the Operating Partnership the option to
become a general partner of New LP if certain conditions were met. The prior
general partners of the Operating Partnership who did not elect to become
general partners of the New LP became limited partners of the New LP. As of
March 15, 1997, only the Registrant has become a general partner of New LP.
Under the prior amended and restated partnership agreement of the
Operating Partnership, the Registrant had the right to become the managing
partner of the Operating Partnership under certain circumstances, including the
occurrence of a default under any document or instrument relating to any debt of
the Operating Partnership or secured by any assets of the Operating Partnership,
the balance of which at such time exceeds $1,000,000. Under the amended
partnership agreement of the Operating Partnership, the Registrant no longer has
the right to become the managing partner of the Operating Partnership.
In addition, the amended partnership agreement of the Operating
Partnership gave the Registrant the right to cause the Operating Partnership to
enter into a major capital event, such as the sale or refinancing of the
Property, without the need for the consent or approval of any other partner or
any other person,
<PAGE>
provided that the proceeds are sufficient to cover priorities First through
Fourth of the Amended Allocations set forth below.
The allocation of cash distributions among the Registrant, the
Development Partners and MSE is revised under the reconstituted Operating
Partnership. The following table sets forth the previous allocation provisions
and the amended allocation provisions. The description of the amended
allocations is a consolidation of the allocation provisions of the Operating
Partnership Agreement, New LP partnership agreement and the Articles of
Shareholders of Newco.
Prior Allocations Amended Allocations
First: Repay Travelers, UDAG and No change
Northern Trust
Second: Repay loans from Development No change
Partners, excluding all amounts
advanced by Financial Place
Corporation ("FPC") to the
Operating Partnership pursuant
to that certain Agreement
Related to Advances dated
August 31, 1992 between FPC and
the Operating Partnership ("FPC
Loans")
Third: Next $22.5 million, 1/3 to No change
Registrant and 2/3 to
Development Partners and MSE
(all but $4.4 million of this
priority has already been
distributed)
Fourth: N/A 50% to Registrant and 50% to
FPC until all accrued and
unpaid fees payable by the
Operating Partnership to FPC
and the FPC Loans are paid in
full
Fifth: To Registrant, 100% of $110 To Registrant, 100% of $50
million reduced by 50% of an million reduced by 50% of any
distributions to Registrant distributions to Registrant
under Third above under Third and Fourth above
Sixth: The balance, 50% to Registrant The balance, approximately 75%
and 50% to Development Partners to Registrant approximately 25%
and MSE to Development Partners and MSE
<PAGE>
Appropriate conforming changes would be made to the provisions
governing the allocation of items of taxable income, gain, loss, deduction or
credit.
Finally, the restructuring required the following additional material
changes to the Operating Partnership Agreement, which changes are included in
the Amendment:
1. Removal of the condition that any sale, exchange or other
disposition of the Registrant's interest in the Operating Partnership requires
the consent of at least 51% of the Limited Partners.
2. The ability of 50% or more of the Limited Partners to
remove a General Partner was deleted.
3. One or more of the General Partners now have the right to assign all
or any portion of its general partner interest to any one or more of its
affiliates without the consent of any other partner or partners.
4. Consent requirements of the Development Partners and
the Limited Partners have been imposed with respect to bankruptcy
filings.
5. FPC now has the option, in its sole discretion, to become the sole
general partner of the Registrant only if certain conditions occur and for so
long as any portion of the Travelers Loan remains outstanding.
The Managing General Partner believes that the Operating Partnership
will not be able to satisfy the Travelers Loan, as modified, at maturity on
October 1, 1998. In addition, it is not expected that the Property will have
sufficient value to enable the Loans to be refinanced. Accordingly, it is likely
that the Property will be lost at maturity of the Travelers Loan.
Employees
The Registrant has no employees. Services are performed for the
Registrant by its General Partners and the agents retained by them.
<PAGE>
Insurance
Based on information received from the general partner of the Operating
Partnership, the General Partners believe that the Property is adequately
insured.
Capital Improvements
Based on information received from the general partner of the Operating
Partnership, the General Partners believe that no significant capital
improvements are planned in the near future for the Property other than tenant
improvements which are incidental to the leasing-up of the Property.
Change in Control
On December 22, 1984, pursuant to an Investment Agreement entering into
among Nomura Asset Capital Corporation ("NACC"), Mr. Arthur J, Halleran, Jr. and
certain other individuals who comprised the senior management of WFA,
transferred the general partnership interest in Linnaeus Associates to W.L.
Realty, L.P. ("W.L. Realty"). W.L. Realty is a Delaware limited partnership, the
general partner of which was, until July 18, 1995, A.I. Realty Company L.L.C.
("Realtyco"). The equity securities of Realtyco are were held by certain
employees of NACC. On July 18, 1995 Londonderry Acquisition II Limited
Partnership, a Delaware limited partnership ("Londonderry II"), an affiliate of
Apollo Real Estate Advisors, L.P. ("Apollo"), acquired, among other things,
Realtyco's general partner interest in W.L. Realty and a sixty four percent
(64%) limited partnership interest in W.L. Realty. WFA owns the remaining
thirty-four percent (34%) limited partnership interest. As a result of the
foregoing acquisitions, Londonderry II is the sole general partner of W.L.
Realty which is the sole general partner of Linnaeus, which in turn is the sole
general partner of WFA. As a result of the foregoing, effective July 18, 1995,
Londonderry II became the controlling entity of the General Partners. In
connection with the transfer of control, the officers and directors of WFA
resigned and Londonderry II appointed new officers and directors. See "Item 9,
Directors, Executive Officers, Promoters and Control Persons; Compliance With
Section 16(a) of the Exchange Act."
<PAGE>
Item 2. Description of Business.
The Registrant has no properties other than its indirect interest in
the Operating Partnership. For a description of the Operating Partnership's
properties, see Item 1 above.
Item 3. Legal Proceedings.
To the best of the Registrant's knowledge, there are no material
pending legal proceedings to which it is a party or to which its properties are
subject.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders during the period
covered by this report.
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
There is no established public trading market for the Units. Transfers
of Units are infrequent and occur only through private transactions.
As of March 15, 1997, there were 630 holders of 550 outstanding Units.
The Registrant's partnership agreement provides that Operating Revenues
(as defined therein) shall be distributed from time to time to its partners in
specified proportions and according to specified priorities. As a result of the
Plan, all excess cash flow of the Operating Partnership, if any, is first used
to establish reserves, pay operating expenses and satisfy the Loans.
Accordingly, there were no distributions paid or accrued to the Limited Partners
during the year ended December 31, 1996 and 1995. See "Item 6, Management's
Discussion and Analysis or Plan of Operation," for information relating to the
Registrant's future distributions.
<PAGE>
Item 6. Management's Discussion and Analysis or Plan of Operation.
Liquidity and Capital Resources
The Registrant was formed for the purposes of investing in the
Operating Partnership. The Registrant requires cash to pay general and
administrative expenses, including audit, printing and mailing costs. The
Registrant has not received any cash distributions from the Operating
Partnership during the last five years, nor are any cash distributions expected
from Operating Partnership in the foreseeable future.
Winthrop made loans to the Registrant to cover general and
administrative expenses in 1991 through 1996, in the aggregate amount of
$245,590, including $61,504 in 1996 and $19,202 in 1995, and has, through 1996,
deferred $2,250,000 of its investor service fee (which fee equals $250,000 per
year). Consequently, the Registrant will require cash to repay such loans, pay
accrued and future investor service fees and general and administrative
expenses. Given the current status with the mortgage lenders, there will not be
any cash distributions from the Operating Partnership in the near future, and
the Registrant will have to rely on additional operational advances from the
General Partners (although there is no obligation under the Registrant's
partnership agreement for the General Partners to continue to fund operating
deficits) as well as continual deferral of their investor services fees. As
discussed in "Item 1, Description of Business" the Operating Partnership
achieved confirmation of its Plan, which restructured its debt and partnership
arrangements. Upon such restructuring, the Operating Partnership did not
recognize gain or loss and the General Partners believe that the effectuation of
the Plan and the restructuring implemented thereby will not have a material
effect on the liquidity of the Operating Partnership or the Registrant. The
principal effect of the restructuring is that it provides the an opportunity for
Limited Partners to retain an ownership interest in the Property, delay the tax
effects of foreclosure and benefit should there be a sufficient upturn in the
Chicago commercial real estate market.
At this time, however, it appears that the original investment
objective of capital growth from the inception of the Registrant will not be
attained and that Limited Partners will not receive a return of their invested
capital. The extent to which invested capital is refunded to Limited Partners is
<PAGE>
dependent upon the performance of the Property and the market in which it is
located. The ability to hold and operate the property is dependent upon the
Operating Partnership's ability to refinance the Property. However, given the
level of debt encumbering the Property, it is not likely the Operating
Partnership will be able to refinance the Property for an amount sufficient to
retire the debt, or realize any proceeds from a disposition of the Property.
Results of Operations
The results of operations in 1996 did not differ significantly from
those in 1995. It is expected that the Registrant's results of operations in
future years will be similar to those in 1996. The Registrant did not receive
any revenues in 1996. The expenses of the Registrant have been the investor
service fee and administrative expenses. Such expenses and the lack of revenues
have caused a substantial loss from operations.
The Registrant's equity in the loss of the Operating Partnership has
been $0 since 1990. The Registrant accounts for its investment in the Operating
Partnership under the equity method of accounting, which permits the deferral of
the recognition of loss which would cause the investment account to become
negative since the Registrant has no obligation to fund such losses. Under the
equity method of accounting, the initial investment account is recorded at cost,
increased or decreased by the Registrant's share of income or losses and
decreased by distributions. In 1989, the investment account was reduced to zero
and the Registrant begin deferring the recognition of its equity in the losses.
In 1995 and 1996, $8,489,415 and $7,399,594, respectively, was deferred. At
December 31, 1996, the cumulative unrecognized loss was $70,045,296. The equity
method of accounting is used solely for financial reporting purposes; all losses
continue to be recognized for tax purposes.
The cumulative deferred losses will be offset against the Registrant's share of
any future income from the Operating Partnership
While the financial statements are presented on the equity method, the
Registrant's primary asset is its interest in Newco and New LP which
collectively own a 100% interest in the Operating Partnership which owns the
Property. It is, therefore, appropriate to briefly describe the results of the
Property operations as reported by Newco, the managing general partner of the
Operating Partnership.
The Property, while well-regarded in the marketplace and relatively
well-leased as compared to the market, has been affected by the market downturn.
The ability of the Property to continue operations for the long term
will depend upon the Operating Partnership's success under its restructured
debt. See "Item 1, Description of Business."
Item 7. Financial Statement.
ONE FINANCIAL PLACE LIMITED PARTNERSHIP
INDEPENDENT AUDITORS' REPORT
FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995:
Balance Sheets
Statements of Operations
Statements of Changes in Partners' Deficit
Statements of Cash Flows
Notes to Financial Statements
INDEPENDENT AUDITORS' REPORT
To the Partners of
One Financial Place Limited Partnership:
We have audited the accompanying balance sheet of One Financial Place Limited
Partnership (an Illinois limited partnership) as of December 31, 1996, and the
related statements of operations, changes in partners' deficit, and cash flows
for the year then ended. 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 audit. The financial statements of One
Financial Place Limited Partnership as of December 31, 1995 and for the year
then ended were audited by other auditors whose report, dated February 14, 1996,
expressed an unqualified opinion on those statements.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to about present fairly, in
all material respects, the financial position of One Financial Place Limited
Partnership as of December 31, 1996, and the results of its operations and its
cash flows for the year then ended, in conformity with generally accepted
accounting principles.
/s/ Deloitte & Touche, LLP
Boston, Massachusetts
March 24, 1997
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
One Financial Place Limited Partnership:
We have audited the accompanying balance sheets of One Financial Place Limited
Partnership (an Illinois limited partnership) as of December 31, 1995 and the
related statements of operations, changes in partners' deficit and cash flows
for the year then ended. These financial statements are the responsibility of
the General Partner. 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 One Financial Place Limited
Partnership as of December 31, 1995, the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 14, 1996
<PAGE>
ONE FINANCIAL PLACE LIMITED PARTNERSHIP
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
<TABLE>
ASSETS 1996 1995
ASSETS - Cash
<S> <C> <C>
$ 18.00 $ 18.00
------ -----
TOTAL ASSETS
18.00 18.00
====== =====
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES - Fees payable - related parties (Note 5) $ 2,495,590.00 $ 2,184,086.00
Total liabilities 2,495,590.00 2,184,086.00
PARTNERS' DEFICIT (Note 1):
Limited partners, 550 units authorized and outstanding 1,848,702.00 2,153,976.00
General partners (4,344,274.00) (4,338,044.00)
Total partners' deficit (2,495,572.00) (2,184,068.00)
TOTAL LIABILITIES AND PARTNERS' DEFICIT $ $
18.00 18.00
====== =====
</TABLE>
See notes to financial statements.
<PAGE>
ONE FINANCIAL PLACE LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
1996 1995
EXPENSES:
<S> <C> <C>
General and administrative $ 2,566.00 $ 1,861.00
Professional fees 58,938.00 17,370.00
Management fee (Note 5) 250,000.00 250,000.00
Total expenses 311,504.00 269,231.00
NET LOSS (311,504.00) (269,231.00)
NET LOSS ALLOCATED TO GENERAL
PARTNERS (Note 1) (6,230.00) (5,385.00)
NET LOSS ALLOCATED TO LIMITED
PARTNERS (Note 1) $(305,274.00) $(263,846.00)
NET LOSS PER UNIT OF INVESTOR LIMITED
PARTNERSHIP INTEREST $ (555.00) $ (479.67)
NUMBER OF INVESTOR LIMITED PARTNER UNITS
OUTSTANDING
550.00 550.00
</TABLE>
See notes to financial statements.
<PAGE>
ONE FINANCIAL PLACE LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
Investor Special
Limited Limited General
Partners Partner Partners Total
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995 $ 2,425,631.00 $ (7,809.00) $ (4,332,659.00) $ (1,914,837.00)
Net loss
(263,819.00) (27.00) (5,385.00) (269,231.00)
------------ ------- ---------- ------------
BALANCE, DECEMBER 31, 1995 2,161,812.00 (7,836.00) (4,338,044.00) (2,184,068.00)
Net loss
(305,243.00) (31.00) (6,230.00) (311,504.00)
------------ ------- ---------- ------------
BALANCE, DECEMBER 31, 1996 $ 1,856,569.00 $ (7,867.00) $ (4,344,274.00) $(2,495,572.00)
============= ========== ============== ==============
</TABLE>
See notes to financial statements.
<PAGE>
ONE FINANCIAL PLACE LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $(311,504.00) $(269,231.00)
Adjustments to reconcile net loss to net cash used by operating
activities:
Changes in assets and liabilities
- increase in fees apyable - related parties 311,504.00 269,202.00
Net cash used by operating activities - (29.00)
NET DECREASE IN CASH - (29.00)
CASH, BEGINNING OF YEAR 18.00 47.00
------ -----
CASH, END OF YEAR $ 18.00 $ 18.00
</TABLE>
See notes to financial statements.
<PAGE>
ONE FINANCIAL PLACE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
1. ORGANIZATION
One Financial Place Limited Partnership (the "Partnership") was formed in
November 1983 under the Uniform Limited Partnership Act of the State of
Illinois for purposes of acquiring and holding for investment a 50%
general partnership interest in One Financial Place Partnership. One
Financial Place Partnership (the "Operating Partnership"), which was
formed as of March 20, 1982, was organized for the purpose of developing a
parcel of land in Chicago, Illinois, consisting of approximately 55,600
square feet, and constructing a 39-story office tower and three-story
trading annex containing a total of approximately 1,014,000 rentable
square feet, which was placed in service in October 1984 (the "Project").
The Partnership will terminate on December 31, 2035, or sooner, in
accordance with the terms of the Partnership Agreement. The General
Partners of the Partnership are Winthrop Financial Co., Inc. ("Winthrop
Financial"); Winthrop Interim Partners I, a limited partnership ("WIPI");
and Linnaeus-Phoenix Associates, Limited Partnership ("Linnaeus"). The
Special Limited Partner is Mansur Investments, Ltd.
In accordance with the limited partnership agreement, profits and losses
are allocated 97.99% to the Investor Limited Partners, 2% to the General
Partners and .01% to the Special Limited Partner.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Financial Statements - The Partnership prepares its financial
statements on the accrual basis of accounting. The Partnership
accounts for its investment in the Operating Partnership on the
equity method. Under the equity method of accounting, the investment
cost (including amounts paid or accrued) is subsequently adjusted by
the Partnership's share of the Operating Partnership's results of
operations and by distributions received or accrued. Equity in the
loss of the Operating Partnership is no longer recognized once the
investment balance reaches zero.
(b) Income Taxes - No provision for income taxes is reflected in the
accompanying financial statements of the Partnership. Partners are
required to report on their individual income tax returns their
allocable share of income, gains, losses, deductions and credits of
the Partnership.
(c) Syndication Costs - Each limited partner's capital account has been
reduced by its pro rata share of syndication costs incurred by the
Partnership.
3. INVESTMENT IN OPERATING PARTNERSHIP
On January 31, 1995 (the "Effective Date"), a Plan of Reorganization for
the Operating Partnership (the "Plan") became effective pursuant to an
Order Confirming Plan of Reorganization for the One Financial Place
Partnership entered on January 19, 1995, by the United States Bankruptcy
Court for the Northern District of Illinois, Eastern Division, in Case No.
94B23642. The Plan was filed due to the Operating Partnership's default on
its mortgage loans, UDAG Loan and Northern Trust Loan, all of which are
discussed on the following pages.
<PAGE>
3. INVESTMENT IN OPERATING PARTNERSHIP (CONTINUED)
The Plan modified the terms of all the secured indebtedness of the
Operating Partnership. The implementation of the Plan eliminated all
existing defaults under the loans. Management of the Operating Partnership
believes the terms of the Plan will enable the Operating Partnership to
generate sufficient cash flow to meet its obligations until the maturity
date of the loans. The modified terms of the loans pursuant to the Plan
are summarized as follows:
(a) First Mortgage Loan - The First Mortgage Loan consists of two parts:
a $150,000,000 loan made on October 5, 1983 by an affiliate of The
Travelers Insurance Company ("Travelers"), which accrues interest at
the rate of 13% per annum (the "Office First Mortgage"), and a
$3,700,000 loan made on May 27, 1986 by Travelers, which accrues
interest at the rate of 13 3/4% per annum (the "Plaza/Garage First
Mortgage"). The accrual rates were unchanged by the Plan through the
original maturity date. As of the Effective Date, the amounts owed on
each of these loans was divided into two parts, which are referred to
in the Plan as the Outstanding Principal Balance and the Accrual
Account. Subject to the deferral discussed hereafter, interest on the
Accrual Account will continue to accrue quarterly but it will not be
payable except in specified circumstances until the maturity of the
loans. The Outstanding Principal Balance of the Office First
Mortgage, which has been increased by advances made in 1993 and 1992
in the amounts of approximately $5,070,000 and $3,717,000,
respectively, for the real estate taxes pursuant to the loan
documents, is $157,249,494 as of the Effective Date. The principal
balances of the Office First Mortgage and Plaza/Garage First Mortgage
as reflected in the December 31, 1996 balance sheet of the Operating
Partnership are $157,249,494 and $3,669,049, respectively.
The maturity dates of both parts of the first mortgage loan have been
extended to October 1, 1998.
Both the Outstanding Principal Balance and the Accrual Account of the
Office First Mortgage and the Plaza/Garage First Mortgage accrued
interest at the original interest rates (13% and 13 3/4%,
respectively) until September 30, 1995 (approximately the original
maturity date of the loans). Thereafter, they accrued interest at
8.41% (the "Market Rate"). Interest is payable monthly on the
Outstanding Principal Balance of the two loans at the rate of 8.0% per
annum through December 31, 1996 and at the Market Rate thereafter. As
an exception to the foregoing, the Plan provided that interest was not
paid for the months of February 1995 through July 1995. In addition,
the Plan provided that a portion of the interest for the months of
December 1994 and January 1995 was not to be paid. All of the interest
deferred pursuant to these provisions of the Plan was added to the
Accrual Account balances of the two parts of the First Mortgage Loan,
as was the excess of interest accruing on the loans after July 1995,
over the current interest payments. No monthly principal amortization
is required by the Plan.
The Office First Mortgage and the Plaza/Garage First Mortgage may be
prepaid at anytime.
<PAGE>
3. INVESTMENT IN OPERATING PARTNERSHIP (CONTINUED)
(a) First Mortgage Loan (Continued) - If the Office First Mortgage and the
Plaza/Garage First Mortgage are repaid, whether by prepayment,
acceleration or at maturity, and the fair market value of the building
and the related real estate interest owned by the Operating
Partnership exceeds the amounts under the Office First Mortgage, the
Plaza/Garage First Mortgage and the Second Mortgage (the "Excess
Value"), the Operating Partnership is required to pay contingent
interest in an amount that, when added to the payments of interest
already made by the Operating Partnership and otherwise required to be
paid on repayment of the loans, would give the mortgages an internal
rate of return 2% above the Market Interest Rate, provided that the
contingent interest due cannot exceed the Excess Value. No accrual for
such contingent interest has been recorded in the financial statements
of the Operating Partnership.
(b) Second Mortgage Loan - The Second Mortgage Loan is a $20,000,000 loan
made on July 8, 1987 by Travelers which accrued interest at the rate
of 10% per annum. The modification of the Second Mortgage under the
Plan parallels that of the Office First Mortgage and the Plaza/Garage
First Mortgage. As of the Effective Date, the amount owed on the
Second Mortgage was also divided into an Outstanding Principal Balance
and an Accrual Account. Subject to the deferral discussed hereafter,
interest on the Outstanding Principal Balance will continue to be due
and payable currently; interest on the Accrual Account will continue
to accrue quarterly but it will not be payable except in specified
circumstances until the maturity of the loans. The Outstanding
Principal Balance of the Second Mortgage is $19,617,685 as of December
31, 1996 and the Effective Date.
The maturity date of the Second Mortgage was extended to October 1,
1998.
Both the Outstanding Principal Balance and the Accrual Account of the
Second Mortgage accrued interest at the original interest rate of 10%
until September 30, 1995 (approximately the original maturity date).
Thereafter, it accrued interest at the Market Rate, as previously
defined. Interest is payable monthly on the Outstanding Principal
Balance of the Second Mortgage at the rate of 8.0% per annum through
December 31, 1996 and at the Market Rate thereafter. The deferral of
interest in regard to the Second Mortgage under the Plan covered the
payments for December 1994 through July 1995. All of the deferred
interest was added to the Accrual Account Balance of the Second
Mortgage, as was the excess of interest accruing on the loan after
July 1995, over the current interest payments. No monthly principal
amortization is required by the Plan.
The Second Mortgage may be prepaid at any time. If the first mortgage
loans are repaid in full, amounts in the Reserve Account (see below)
in excess of $5,000,000 with the exceptions stated below, will be
applied to the Second Mortgage.
The provisions for contingent interest stated above also apply to the
Second Mortgage.
(c) Accrual Account and Other Plan Provisions - The Accrual Account
Balance as of December 31, 1996 and 1995, related to all the
Travelers' mortgage loans, was $36,206,670 and $32,226,638,
respectively, as reflected in the Operating Partnership's balance
sheet under accrued interest on loans.
During 1996 and 1995, Travelers applied approximately $14,442,900 and
$6,232,000, respectively, of rental payments to interest.
<PAGE>
3. INVESTMENT IN OPERATING PARTNERSHIP (CONTINUED)
(c) Accrual Account and Other Plan Provisions (Continued) - Since
mid-1992, all rents and other revenues generated from the Operating
Partnership's business have been deposited in an interest-bearing
bank account under the control of Travelers. Pursuant to the Plan,
Travelers remits to the Operating Partnership funds sufficient to pay
the operating expenses of the property, pays any interest due under
the Plan and funds an escrow for real estate taxes. Any receipts in a
month in excess of these requirements are transferred to a Reserve
Account where it is available to the Operating Partnership to meet
its obligations under the Plan. If the amount in the reserve account
(except for amounts being held for specific uses, such as payment of
real estate taxes or costs associated with signed leases) exceeds
$5,000,000, Travelers has the right to apply the excess to the first
mortgage loans. At December 31, 1996 and 1995, Travelers held
approximately $14,669,000 and $14,691,000, respectively, of cash
which is reflected in the balance sheets of the Operating Partnership
as restricted cash and cash equivalents.
Certain of the owners of the Operating Partnership's partners have
issued guarantees that will become effective only if these owners
force the Operating Partnership into bankruptcy. If a Forbearance
Termination Event, as defined in the Plan, occurs, the property will
revert to the first mortgage lenders.
During 1996 and 1995, the Operating Partnership expensed approximately
$3,200 and $932,000, respectively, of professional fees, relating to
the Plan. Under the Plan, the Operating Partnership is responsible for
specified professional fees of the lender incurred in connection with
the Plan which are to be paid from cash flow of the property.
(d) UDAG Loan - The Operating Partnership received a $4,000,000 loan
under an Urban Development Action Grant ("UDAG Loan"). The UDAG Loan
accrued interest at 12% until October 1987, at which time semiannual
interest and principal payments became due based upon a 15-year
amortization schedule and a 12% interest rate.
Under the Plan, the interest rate was retroactively adjusted, and
certain accrued interest amounts were capitalized. Specifically, the
Plan provides that the interest rate payable on the UDAG Loan is
simple interest at 12% per annum through July 1991, and simple
interest at 4% per annum from August 1, 1991. The Operating
Partnership has agreed to make quarterly payments to the City of
Chicago in the amount of 54.75% of the management fee under the
Management Agreement (this is possible because Financial Place
Corporation agreed, in an amendment to the Management Agreement, that
payment of a portion of its fee is to be deferred). The Plan makes
these the only funds of the Operating Partnership that can be used to
pay the UDAG Loan. These payments are to be applied first to
interest, then to principal. The maturity date of the UDAG Loan is
changed by the Plan to October 1, 1998 from September 30, 1995. The
UDAG Loan may be prepaid at any time.
<PAGE>
3. INVESTMENT IN OPERATING PARTNERSHIP (CONTINUED)
(d) UDAG Loan (Continued) - As of the effective date of the Plan,
$4,458,771 of interest on the indebtedness per the original agreement
has been accrued. Pursuant to the Plan, as of the Effective Date,
$3,161,220 of accrued interest was capitalized and added to the
principal balance of the UDAG Loan. The remaining $1,297,551 of
interest was forgiven. Under Statement of Financial Accounting
Standards No. 15 ("SFAS No. 15"), "Accounting by Debtors and Creditors
for Troubled Debt Restructurings," if the total future payments under
the restructuring are less than the principal and accrued interest
balance of the former loan at the time of restructuring, a gain on the
restructuring should be recognized. As a result of this, the Operating
Partnership reported a gain on restructuring the UDAG Loan in the
amount of $180,000 for both 1996 and 1995 and recognized no interest
expense for the years ended December 31, 1996 and 1995. It is expected
that no interest expense will be recorded through the maturity of the
loan.
As of December 31, 1996, the principal balance and accrued interest on
the UDAG Loan was $7,253,238 and $355,749, respectively. In accordance
with SFAS No. 15, the accrued interest is classified in the balance
sheet of the Operating Partnership as part of mortgage and
construction notes payable.
(e) Northern Trust Loan - The Plan provides that the interest rate
payable to the Northern Trust Company under its loan will be reduced
from the prime rate to 4% per annum on the Effective Date. The
outstanding principal balance of the loan as of the Effective Date
was $2,800,000. The Operating Partnership agreed to make quarterly
payments to the Northern Trust Company in the amount of 20.25% of the
management fee under the Management Agreement; the Plan makes these
the only funds of the Operating Partnership that can be used to pay
the Northern Trust Loan. These payments are to be applied first to
interest then to principal. The maturity date of the Northern Trust
Loan has been changed by the Plan to October 1, 1998. The Northern
Trust Loan may be prepaid at any time. Under the Plan, the Northern
Trust Company released its security for its loan. As of December 31,
1996, all accrued interest related to the Northern Trust Loan has
been paid.
(f) Operating Partnership Agreement (as Amended and Restated) - As a
result of the Plan, the One Financial Place Partnership Agreement was
amended and restated (the "Operating Partnership Agreement"). Under
the Operating Partnership Agreement, OFP Corporation ("Newco") and
Financial Place 1994 Limited Partnership ("NLP") became the partners
of the Operating Partnership in January 1995. Each of the existing
partners of the Operating Partnership as of December 31, 1994 ("prior
partners") transferred their entire interest in the Operating
Partnership to NLP. Newco, whose shareholders are the prior partners,
is to be admitted as a partner of the Operating Partnership with an
initial capital contribution of $1,000. As of the date of these
financial statements, this contribution has not yet been received. As
the prior partners' interests in the Operating Partnership
effectively remain the same, the Plan and the resultant amendment to
the Operating Partnership Agreement have no impact on the basis of
accounting utilized for financial statement purposes.
<PAGE>
3. INVESTMENT IN OPERATING PARTNERSHIP (CONTINUED)
(f) Operating Partnership Agreement (as Amended and Restated) (Continued)
- Profits and losses are allocated in accordance with the terms of
the Operating Partnership Agreement. Net Cash Receipts and Capital
Proceeds, as defined in the Operating Partnership Agreement, are to
be distributed cumulatively as follows:
1. First, to pay principal and unpaid accrued interest on any loans
or advances, excluding Financial Place Corporation ("FPC") loans
made after January 19, 1995, to the Operating Partnership by any
of the Partners or shareholders or affiliates of the Partners.
2. $4.4 million to NLP.
3. 50% to pay the FPC Loan and deferred FPC fees and 50% to be
distributed to NLP until the FPC Loan and deferred FPC fees are
paid in full.
4. $49,266,667 less 50% of the amount distributed to NLP pursuant to
(3) above shall be distributed 100% to NLP.
5. The remainder shall be distributed 1% to Newco and 99% to NLP.
In the event of a Major Capital Event, distributions will be made as
specified in (1) through (4) above, then to the partners having
positive capital account balances and, finally, 1% to Newco and 99% to
NLP.
The Partnership's investment in the Operating Partnership at December
31, 1996 and 1995 is summarized as follows:
<TABLE>
1996 1995
<S> <C> <C>
Cumulative capital contributions made in cash $ 47,900,000 $ 47,900,000
Acquisition costs 164,000 164,000
Distribution from Operating Partnership (6,033,000) (6,033,000)
Recognized losses from Operating Partnership (42,031,000) (42,031,000)
------------------ ----- ------------
$ - $ -
</TABLE>
As discussed in Note 2 to the financial statements, the Partnership
accounts for its investment in the Operating Partnership on the equity
method. Under the equity method of accounting, the investment cost is
adjusted by the Partnership's share of the Operating Partnership's
results of operations and by distributions received or accrued. Equity
in the loss of the Operating Partnership is no longer recognized
because the investment balance has been written down to zero.
<PAGE>
3. INVESTMENT IN OPERATING PARTNERSHIP (CONTINUED)
(f) Operating Partnership Agreement (as Amended and Restated) (Continued)
-The financial statements of the Operating Partnership as of December
31, 1996 and 1995 and for the years then ended are as follows:
<TABLE>
Balance Sheets 1996 1995
Assets
<S> <C> <C>
Building and improvements, net of accumulated
depreciation of $48,573,159 and $45,388,403 in 1996 and
1995, respectively $ 74,926,228.00 $ 77,692,445.00
Land 8,675,000.00 8,675,000.00
Other assets, net of accumulated amortization of $16,432,674
and $15,568,380 in 1996 and 1995, respectively 25,922,015.00 27,434,463.00
-------------- -------------
Total assets $ 109,523,243.00 $ 113,801,908.00
================= ================
Liabilities and Partners' Deficit
Liabilities:
Mortgage and construction notes payable $ 188,145,212.00 $ 188,927,462.00
Other liabilities 53,575,276.00 49,597,353.00
----------------- ------------
241,720,488.00 238,524,815.00
Partners' deficit (132,197,245.00) (124,722,907.00)
---------------- ----------------
Total liabilities and partners' deficit $ 109,523,243.00 $ 113,801,908.00
================= ================
</TABLE>
<PAGE>
3. INVESTMENT IN OPERATING PARTNERSHIP (CONTINUED)
(f) Operating Partnership Agreement (as Amended and Restated) (Continued)
<TABLE>
Statements of Operations 1996 1995
<S> <C> <C>
Revenues:
Rental income $ 28,199,557.00 $ 30,356,916.00
Interest and other income 1,759,445.00 1,212,669.00
------------- ------------
29,959,002.00 31,569,585.00
Expenses:
Depreciation and amortization 4,049,050.00 4,400,993.00
Interest expense 19,031,074.00 21,204,248.00
Other expenses 14,530,047.00 13,787,531.00
-------------- -------------
37,610,171.00 39,392,772.00
Net loss before reorganization items (7,651,169.00) (7,823,187.00)
Reorganization items:
Gain on debt restructuring 180,000.00 180,000.00
Professional fees (3,169.00) (931,980.00)
---------- ------------
Net loss $ (7,474,338.00) $ (8,575,167.00)
================ ================
Net loss allocated to One Financial Place
Limited Partnership $ (7,399,594.00) $ (8,489,415.00)
================ ================
Net loss allocated to other partners $ (74,744.00) $ (85,752.00)
================= =================
</TABLE>
<PAGE>
4. TAX LOSS
The Partnership's tax losses for 1996 and 1995 differ from the net loss
for financial reporting purposes primarily due to not recognizing
Operating Partnership losses in excess of investment for financial
reporting purposes. These losses are fully recognized for tax purposes.
The 1996 tax return for the Operating Partnership has not yet been
completed as of the date of these financial statements; therefore, the
Partnership's tax loss for 1996 is an estimate and is subject to change.
The tax losses for 1996 and 1995 are as follows:
<TABLE>
1996 1995
<S> <C> <C>
Net loss for financial reporting purposes $ (311,504.00) $ (269,231.00)
Add - expenses accrued and payable to related parties
not deductible until year of payment for tax purposes 250,000.00 250,000.00
Deduct - equity in Operating Partnership's tax loss in
excess of financial statement loss (10,417,634) (4,092,166.00)
------ ------------- --- --------------
Tax loss $ (10,479,140) $(4,111,397.00)
== ================ = ===============
</TABLE>
5. RELATED-PARTY TRANSACTIONS
Related-party transactions with Winthrop Financial and its affiliates
include the following:
Expenses for 1996 and 1995 include management fees of $250,000 per
year payable to Winthrop Financial.
At December 31, 1996 and 1995, fees payable to related parties
included professional fees and other advances payable to Winthrop
Financial of $245,590 and $184,086, respectively.
Fees payable to related party included management fees of $2,250,000
and $2,000,000 as of December 31, 1996 and 1995, respectively.
Item 8. Disagreements with Accountants on Accounting and Financial Disclosure.
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance With Section 16(a) of the Exchange
Act.
Registrant has no officers or directors. The Managing General Partner
manages and controls substantially all of Registrant's affairs and has general
responsibility and ultimate authority in all matters affecting its business. As
of March 1, 1997, the names of the directors and executive officers of the
Managing General Partner and the position held by each of them, are as follows:
Has Served as
Position Held with the a Director or
Name and Age Managing General Partner Officer Since
Michael L. Ashner Chief Executive Officer 1-96
and Director
Richard J. McCready President and
Chief Operating Officer 7-95
Jeffrey Furber Executive Vice President 7-95
and Clerk
Edward Williams Chief Financial Officer 4-96
Vice President and
Treasurer
Peter Braverman Senior Vice President 1-96
Michael L. Ashner, age 45, has been the Chief Executive Officer of
Winthrop Financial Associates, A Limited Partnership ("WFA") since January 15,
1996. From June 1994 until January 1996, Mr. Ashner was a Director, President
and Co-chairman of National Property Investors, Inc., a real estate investment
company ("NPI"). Mr. Ashner was also a Director and executive officer of NPI
Property Management Corporation ("NPI Management") from April 1984 until January
1996. In addition, since 1981 Mr. Ashner has been President of Exeter Capital
Corporation, a firm which has organized and administered real estate limited
partnerships.
<PAGE>
Richard J. McCready, age 38, is the President and Chief Operating Officer
of WFA and its subsidiaries. Mr. McCready previously served as a Managing
Director, Vice President and Clerk of WFA and a Director, Vice President and
Clerk of the Managing General Partner and all other subsidiaries of WFA. Mr.
McCready joined the Winthrop organization in 1990.
Jeffrey Furber, age 37, has been the Executive Vice President of WFA
and the President of Winthrop Management since January 1996. Mr. Furber served
as a Managing Director of WFA from January 1991 to December 1995 and as a Vice
President from June 1984 until December 1990.
Edward V. Williams, age 56 , has been the Chief Financial Officer of
WFA since April 1996. From June 1991 through March 1996, Mr. Williams was
Controller of NPI and NPI Management. Prior to 1991, Mr. Williams held other
real estate related positions including Treasurer of Johnstown American
Companies and Senior Manager at Price Waterhouse.
Peter Braverman, age 45, has been a Senior Vice President of WFA since
January 1996. From June 1995 until January 1996, Mr. Braverman was a Vice
President of NPI and NPI Management. From June 1991 until March 1994, Mr.
Braverman was President of the Braverman Group, a firm specializing in
management consulting for the real estate and construction industries. From 1988
to 1991, Mr. Braverman was a Vice President and Assistant Secretary of Fischbach
Corporation, a publicly traded, international real estate and construction firm.
Each of the above persons are also directors or officers of a general
partner (or general partner of a general partner) of the following limited
partnerships which either have a class of securities registered pursuant to
Section 12(g) of the Securities and Exchange Act of 1934, or are subject to the
reporting requirements of Section 15(d) of such Act: Winthrop Partners 79
Limited Partnership; Winthrop Partners 80 Limited Partnership; Winthrop Partners
81 Limited Partnership; Winthrop Residential Associates I, A Limited
Partnership; Winthrop Residential Associates II, A Limited Partnership; Winthrop
Residential Associates III, A Limited Partnership; 1999 Broadway Associates
Limited Partnership; Indian River Citrus Investors Limited Partnership;
Nantucket Island Associates Limited Partnership; Presidential Associates I
Limited Partnership; Riverside Park Associates Limited Partnership; Springhill
Lake Investors Limited Partnership; Twelve AMH Associates Limited Partnership;
Winthrop California Investors Limited Partnership; Winthrop Growth Investors I
Limited Partnership; Winthrop Interim Partners I, A Limited Partnership;
Southeastern Income Properties Limited Partnership; Southeastern Income
Properties II Limited Partnership; Winthrop Miami Associates Limited Partnership
and Winthrop Apartment Investors Limited Partnership.
Except as indicated above, neither the Registrant nor the Managing
General Partner has any significant employees within the meaning of Item 401(b)
of Regulation S-B. There are no family relationships among the officers and
directors of the Managing General Partner.
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Registrant under Rule 16a-3(e) during the Registrant's most
recent fiscal year and Forms 5 and amendments thereto furnished to the
Registrant with respect to its most recent fiscal year, the Registrant is not
aware of any director, officer, or beneficial owner of more than ten percent of
the units of limited partnership interest in the Registrant that failed to file
on a timely basis, as disclosed in the above Forms, reports required by section
16(a) of the Exchange Act during the most recent fiscal year or prior fiscal
years.
Item 10. Executive Compensation
The Registrant is not required to and did not pay any compensation to
the officers or directors of the Managing General Partner. The Managing General
Partner does not presently pay any compensation to any of its officers and
directors (See "Item 12, Certain Relationships and Related Transactions").
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and
Management.
(a) Security Ownership of Certain Beneficial Owners.
The Registrant is a limited partnership and has issued Units of limited
partnership interest. The Units are not voting securities, except that the
consent of the Limited Partners is required to approve or disapprove certain
transactions including the removal of a General Partner, certain amendments to
the Partnership Agreement, the dissolution of the Registrant or the sale of all
or substantially all of the assets of the Partnership. No Limited Partner owns
beneficially more than 5% of the Units in the Registrant.
Winthrop, WIPI and Linnaeus own all of the general partnership
interests in the Registrant. In such capacities, they are entitled in the
aggregate to 2% of cash flow and 8% of the proceeds of a Major Capital Event (as
defined in the Registrant's partnership agreement). No other person or group is
known by the Registrant to be the beneficial owner of more than 5% of the
outstanding partnership interests of the Registrant as of the date of this
Annual Report.
(b) Security Ownership of Management.
No executive officer, director or partner of Winthrop or Linnaeus and
no executive officer, director or general partner of WIPI owns any Units in his
individual capacity as of the date hereof.
(c) Changes in Control.
There exists no arrangement known to the Registrant the operation of
which may at a subsequent date result in a change in control of the Registrant,
except as follows:
Item 12. Certain Relationships and Related Transactions.
(a) Transactions with management and others.
The directors, officers and partners of Winthrop and Linnaeus and the
directors, officers and general partners of WIPI receive no remuneration or
other compensation from the Registrant. Under the Registrant's partnership
agreement, the General Partners and their affiliates are entitled to receive
various fees, commissions, cash distributions, allocations of taxable income,
and loss and expense reimbursements from the Registrant. Winthrop accrued its
$250,000 investor service fee for the years ended December 31, 1995 and 1996. As
of the December 31, 1996, Winthrop had accrued a total of $2,250,000 in investor
service fees.
There were no other material transactions between the General Partners
and their affiliates and the Registrant or the Operating Partnership and the
General Partners and their affiliates during the years ended December 31, 1995
or 1996.
PART IV
13. Exhibits and Reports on Form 8-K
(a) Exhibits:
The Exhibits listed on the accompanying Index to Exhibits are
filed as part of this Annual Report and incorporated in this
Annual Report as set forth in said Index.
(b) Reports on Form 8-K - None
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly cased this report to be signed on
its behalf by the undersigned, there unto duly authorized.
ONE FINANCIAL PLACE LIMITED PARTNERSHIP
By: Winthrop Financial Co., Inc.
General Partner
By: /s/ Michael L. Ashner
Michael L. Ashner
Chief Executive Officer
Date: March 29, 1997
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/Name Title Date
/s/ Michael L. Ashner Chief Executive March 29, 1997
Michael L. Ashner Officer and Director
/s/ Edward V. Williams Chief Financial Officer March 29, 1997
Edward V. Williams
<PAGE>
Index to Exhibits
Exhibit
Number Document
3(i) One Financial Place Limited Partnership Amended and
Restated Agreement and Certificate of Limited
Partnership(1)
3(ii) Amendment to Amended and Restated Partnership Agreement
of One Financial Place Limited Partnership, effective
as of December 1, 1987 (4)
3(iii) Amendment to the Amended and Restated Agreement and
Certificate of Limited Partnership of One Financial
Place Limited Partnership, effective November 28, 1994
(5)
3(iv) Amended and Restated Partnership Agreement of One
Financial Place Partnership(1)
3(v) First Amendment to Amended and Restated Partnership
Agreement of One Financial Place Partnership dated as
of March 30, 1984 (2)
3(vi) Second Amendment to Amended and Restated Partnership
Agreement and Certificate of Limited Partnership of One
Financial Place Partnership dated as of August 1,
1985(2)
3(vii) Third Amendment to the Amended and Restated Partnership
Agreement of One Financial Place Partnership, effective
February 17, 1988 (3)
3(viii) Certificate of Amendment to Certificate of One
Financial Place Limited Partnership, dated September 7,
1988 (4)
10(i) Amended and Restated Partnership Agreement of One
Financial Place Partnership and all amendments thereto
(incorporated by reference to Exhibits 3(iii) through
3(viii)(1)
<PAGE>
10(ii) Form of standard tenant lease for the Property(1)
10(iii) Midwest Stock Exchange Lease dated October 12, 1983(1)
10(iv) Letter Loan Agreement dated July 6, 1984, among
Chemical Bank, Bank of New England, N.A. and the First
National Bank of Boston, as Lenders, Chemical Bank, as
agent for the lenders, in such capacity "Agent"), the
Registrant, as borrower, and First Winthrop and
Winthrop as guarantors (the "Revolving Loan Agreement")
(1)
10(v) Revolving Loans Note dated as of July 6, 1984 made by
the Investor Partnership payable to the order of Agent
in the original principal amount of $34,990,000 (1)
10(vi) Pledge and Security Agreement dated as of July 6, 1984
between the Registrant and Agent securing the Revolving
Loan with among other things the LP Notes (Schedule A
thereto omitted) (1)
10(vii) Surety Bond dated as of July 6, 1984 from Continental
Casualty Company in favor of the Registrant (1)
10(viii) Interest Rate Exchange Agreements (3 year and 4 year,
respectively) both dated as of April 1, 1984 between
The First National Bank of Boston and the Registrant
(1)
10(ix) Loan Agreement between the Operating Partnership and
the Prospect Company dated September 30, 1983, and all
amendments thereto (the "Travelers Loan Agreement") (1)
10(x) Promissory Note dated September 30, 1983 in the amount
of $150,000,000 from the Operating Partnership to the
Prospect Company (1)
10(xi) Mortgage Agreement dated as of September 30, 1983
between the Operating Partnership and the Prospect
Company securing the Travelers Loan (1)
10(xii) Completion Guaranty and Negative Cash Flow Guaranty
both dated as of September 3, 1983 by Messrs. Casati,
<PAGE>
Heise, Wislow and Bicek, as guarantors, in favor of the
Prospect Company (1)
10(xiii) Redevelopment Agreement dated April 20, 1983 between
the City of Chicago and the Operating Partnership (the
"UDAG Loan Agreement")(1)
10(xiv) Promissory Notes dated October 3, 1983 of $1,000,000
and $3,000,000 respectively, from the Operating
Partnership to the City of Chicago (1)
10(xv) Mortgage, Assignment of Rents and Security Agreement
dated October 3, 1983 between the Operating Partnership
and the City of Chicago securing the UDAG Loan (1)
10(xvi) Amended and Restated Management Agreement dated October
3, 1983 between Financial Place Corporation as
Management Agent, and the Operating Partnership (1)
10(xvii) Amended and Restated Development Management Services
Agreement dated December 1, 1983, between Financial
Place Corporation and the Operating Partnership (1)
10(xviii) Completion Guaranty dated December 1, 1983 between
Casati-Heise, Option Center, Bicek and Wislow, as
Guarantors, and the Registrant (1)
10(xix) Guaranty Agreement dated December 1, 1983 between the
Operating Partnership, as Guarantor, and the Registrant
(1)
10(xx) Subordinate Note, mortgage and Security Agreement
between the Operating Partnership and Travelers, dated
July 8, 1987 (3)
10(xxi) First Amendment to the Amended and Restated Management
Agreement between One Financial Place Corporation and
the Operating Partnership dated October 9, 1987 (3)
10(xxii) Plan of Reorganization for Operating Partnership (5)
16 Letter from Arthur Andersen dated March 24, 1997 (7)
99(i) Investor Partnership Explanatory Statement dated
January 15, 1988 (3)
<PAGE>
99(ii) Pages 1-70 of the Registrant's Registration Statement
on Form 10 Filed on April 28, 1985 as Amended by
Amendment No. 1 Thereto on Form 8 Filed on August 29,
1985 (1)
99(iii) Pages 4-5 of the Registrant's Annual Report on Form 10-
K for the year ended December 31, 1987 and filed on
August 22, 1989 (4)
99(iv) Pages 29-56 and 60-62 of the Confidential Memorandum
filed as Exhibit 28 to the Registrant's Registration
Statement on Form 10 filed on August 29, 1985 (1)
99(v) Investor Partnership Report for the period ending
January 19, 1995. (6)
- ---------------------------
(1) Incorporated by reference from the Partnership's Registration Statement
on Form 10 filed on April 27, 1985 as amended by Amendment No. 1
thereto on Form 8 filed on August 29, 1985.
(2) Incorporated by reference from the Partnership's Annual Report on Form
10-K, filed on March 30, 1986.
(3) Incorporated by reference from the Registrant's Annual Report on Form
10-K for the year ended December 31, 1987 and filed on August 22, 1989.
(4) Incorporated by reference from the Registrant's Annual Report on Form
10-K, dated as of December 31, 1991.
(5) Incorporated by reference from the Registrant's Current Report on Form
8-K for the period ending January 19, 1995 and filed on February 2,
1995.
(6) Incorporated by reference from the Registrant's Current Report on Form
8-K for the period ending January 19, 1995 and filed on February 2,
1995.
(7) Incorporated by reference to the Registrant's Current Report on Form
8-K dated March 24, 1977.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial
information extracted from audited financial
statements for the one year period ending
December 31, 1996 and is qualified in its
entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000739918
<NAME> ONE FINANCIAL PLACE LIMITED PARTNERSHIP
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 18
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 18
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 18
<CURRENT-LIABILITIES> 2,495,590
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> (2,495,572)
<TOTAL-LIABILITY-AND-EQUITY> 18
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 311,504
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (311,504)
<INCOME-TAX> (311,504)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (311,504)
<EPS-PRIMARY> (566.37)
<EPS-DILUTED> (566.37)
</TABLE>
