<PAGE>
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, 1997 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)
5 Cambridge Center, Cambridge, Massachusetts 02142
(Address of principal executive offices) (Zip Code)
Registrant's telephone no., including area code: (617) 234-3000
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
None
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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.
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.
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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 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, 1997, 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.
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 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
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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. See Item 6 "Management's Discussion and
Analysis or Plan of Operation" for information relating to the Registrant's
ability to satisfy the Travelers Loan at maturity. 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.
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 also serves as the managing general
partner of New LP and the business and affairs of Newco are 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
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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, requires 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, 1998, only the Registrant has
become a general partner of New LP.
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, 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.
<TABLE>
<CAPTION>
Prior Allocations Amended Allocations
<S> <C> <C>
First: Repay Travelers, UDAG and Northern Trust No change
Second: Repay loans from Development Partners, No change
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 Registrant and 2/3 No change
to Development Partners and MSE (all but $4.4
million of this priority has already been
distributed)
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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 million reduced by To Registrant, 100% of $50 million reduced by
50% of any distributions to Registrant under 50% of any distributions to Registrant under
Third above Third and Fourth above
Sixth: The balance, 50% to Registrant and 50% to The balance, 99% to New LP, 1% to Nemco
Development Partners and MSE
</TABLE>
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.
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Employees
The Registrant has no employees. Services are performed for the
Registrant by its General Partners and the agents retained by them.
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 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, a general
partner interest in W.L. Realty, L.P. ("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 was, until
October 27, 1997, the sole, and currently is the managing, 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."
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.
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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.
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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, 1998, there were 626 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, 1997 and 1996. See "Item 6, Management's
Discussion and Analysis or Plan of Operation," for information relating to the
Registrant's future distributions.
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Item 6. Management's Discussion and Analysis or Plan of Operation.
The matters discussed in this Form 10-KSB contain certain
forward-looking statements and involve risks and uncertainties (including
changing market conditions, competitive and regulatory matters, etc.) detailed
in the disclosure contained in this Form 10-KSB and the other filings with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussion of the Registrant's business and results of operations, including
forward-looking statements pertaining to such matters, does not take into
account the effects of any changes to the Registrant's business and results of
operation. Accordingly, actual results could differ materially from those
projected in the forward-looking statements as a result of a number of factors,
including those identified herein.
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 1997, in the aggregate amount of
$322,091, including $76,501 in 1997 and $61,509 in 1996, and has, through 1997,
deferred $2,500,000 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. The principal effect of the restructuring is that it provided 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. The Property,
while well-regarded in the marketplace and relatively well-leased as compared to
the
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market, has been affected by the market downturn. As a result, it is not
expected that the Operating Partnership will be able to sell or refinance the
Property for sufficient value upon the existing loans maturity in October 1998.
As a result, unless the Partnership can negotiate an extension or modification
of the loan or, sell or refinance the Property, it is likely that the Property
will be lost through foreclosure.
At this time, 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 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 or restructure the existing
indebtedness. 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.
The Registrant is dependent upon the Managing General Partner for
management and administrative services. The Managing General Partner has
completed an assessment and believes that its computer systems will function
properly with respect to dates in the year 2000 and thereafter (the "Year 2000
Issue"). Accordingly, it is not expected that the Registrant will incur any
material costs associated with, or be materially affected by, the Year 2000
Issue.
Results of Operations
The results of operations in 1997 did not differ significantly from
those in 1996. Until the Registrant sells its interest in the Operating
Partnership or the Property is sold or foreclosed upon, it is expected that the
Registrant's results of operations in future years will be similar to those in
1997. The Registrant did not receive any revenues in 1997 or 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
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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 1996 and 1997, $7,399,594 and
$8,127,946, respectively, was deferred. At December 31, 1997, the cumulative
unrecognized loss was $78,173,242. 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
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Item 7. Financial Statement.
<PAGE>
ONE FINANCIAL PLACE LIMITED PARTNERSHIP
TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORT F-1
FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996:
Balance Sheets F-2
Statements of Operations F-3
Statements of Changes in Partners' Deficit F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners of
One Financial Place Limited Partnership:
We have audited the accompanying balance sheets of One Financial Place Limited
Partnership (the "Partnership") (an Illinois limited partnership) as of
December 31, 1997 and 1996, and the related statements of operations, changes
in partners' deficit, and cash flows for the years 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 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, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
The accompanying financial statements for the year ended December 31, 1997
have been prepared assuming the Partnership will continue as a going concern.
As discussed in Note 6 to the financial statements, the recurring losses from
operations that have been experienced by One Financial Place Partnership (the
"Operating Partnership"), the primary asset of the Partnership, the limited
availability of additional capital to the Operating Partnership and the
approaching maturity date of the Operating Partnership's mortgage loans
payable, raise substantial doubt about the Operating Partnership's ability to
continue as a going concern. The doubt about the Operating Partnership's
ability to continue as a going concern, in turn, raises significant doubts
about the Partnership's ability to continue as a going concern. Management's
plans concerning these matters are also described in Note 6. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
Deloitte & Touche LLP
Boston, Massachusetts
March 13, 1998
<PAGE>
ONE FINANCIAL PLACE LIMITED PARTNERSHIP
BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
ASSETS 1997 1996
<S> <C> <C>
CASH $ 19 $ 18
------------ -----------
TOTAL ASSETS $ 19 $ 18
============ ===========
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES - Fees payable - related parties $ 2,822,091 $ 2,495,590
------------ -----------
Total liabilities 2,822,091 2,495,590
------------ -----------
PARTNERS' DEFICIT:
Limited partners, 550 units authorized and outstanding 1,528,732 1,848,702
General partners (4,350,804) (4,344,274)
------------ -----------
Total partners' deficit (2,822,072) (2,495,572)
------------ -----------
TOTAL LIABILITIES AND PARTNERS' DEFICIT $ 19 $ 18
============ ===========
</TABLE>
See notes to financial statements.
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
1997 1996
EXPENSES:
<S> <C> <C>
General and administrative $ 2,288 $ 2,566
Professional fees 74,212 58,938
Management fee 250,000 250,000
---------- ----------
Total expenses 326,500 311,504
---------- ----------
NET LOSS (326,500) (311,504)
NET LOSS ALLOCATED TO GENERAL
PARTNERS (6,530) (6,230)
---------- ----------
NET LOSS ALLOCATED TO LIMITED
PARTNERS $ (319,970) $ (305,274)
========== ==========
NET LOSS PER UNIT OF INVESTOR LIMITED
PARTNERSHIP INTEREST $ (582) $ (555)
========== ==========
NUMBER OF INVESTOR LIMITED PARTNER UNITS
OUTSTANDING 550 550
========== ==========
</TABLE>
See notes to financial statements.
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Investor Special Total
Limited Limited General Partners'
Partners Partner Partners Deficit
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1996 $ 2,161,812 $ (7,836) $ (4,338,044) $ (2,184,068)
Net loss (305,243) (31) (6,230) (311,504)
----------- -------- ------------ ------------
BALANCE, DECEMBER 31, 1996 1,856,569 (7,867) (4,344,274) (2,495,572)
Net loss (319,937) (33) (6,530) (326,500)
----------- -------- ------------ ------------
BALANCE, DECEMBER 31, 1997 $ 1,536,632 $ (7,900) $ (4,350,804) $ (2,822,072)
============ ========== ============== =============
</TABLE>
See notes to financial statements.
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
1997 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (326,500) $ (311,504)
Adjustment to reconcile net loss to net cash provided by
operating activities -
Changes in assets and liabilities - increase in fees payable - related
parties 326,501 311,504
-------- -------
Net cash provided by operating activities 1 -
-------- ------
NET INCREASE IN CASH 1 -
CASH, BEGINNING OF YEAR 18 18
-------- ------
CASH, END OF YEAR $ 19 $ 18
======== =======
</TABLE>
See notes to financial statements.
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996
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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 (the
"Operating 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 using the
equity method of accounting. 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 losses of the Operating Partnership are
no longer recognized as the investment balance has reached $0.
(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
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Partnership's default on its mortgage loans, Urban Development Action
Grant Loan ("UDAG Loan") and Northern Trust Loan, all of which are
discussed on the following pages.
-7-
<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. However, the Operating
Partnership's ability to meet its obligations at the maturity date of
the loans is uncertain (Note 6). 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 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
Office First Mortgage, which was increased by advances made in 1993
and 1992 in the amounts of approximately $5,070,000 and $3,171,000,
respectively, of the real estate taxes pursuant to the loan
documents, was $157,249,494 as of the Effective Date. The
Outstanding Principal Balance of the Plaza/Garage First Mortgage
was $3,669,047 as of the Effective Date. The principal balances of
the Office First Mortgage and Plaza/Garage First Mortgage as
reflected in the December 31, 1997 balance sheet of the Operating
Partnership are $157,249,494 and $3,669,047, 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 was 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 through 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.
-8-
<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 ("Second Mortgage")
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 $19,617,684 as of December 31, 1997 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 page 9) in excess of $5,000,000 with the exceptions stated as
follows, 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 - Of the total
accrued interest balance as of December 31, 1997 of
$39,345,602, an amount of $39,255,063 relates to interest
accrued on all of the Traveler's mortgage loans. The total
accrued interest balance as of December 31, 1996 related to
interest accrued on all of the Traveler's mortgage loans and
was $36,206,670 as reflected in the balance sheet of the
Operating Partnership under accrued interest on loans.
-9-
<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 funds
received within the month, in excess of these requirements, are
transferred to a "Reserve Account" where they are available to the
Operating Partnership to meet its obligations under the Plan. After
January 1, 1997, 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
Loan. At December 31, 1997 and 1996, Travelers held approximately
$11,969,000 and $14,669,000, 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, the Operating Partnership expensed $3,162 of
professional fees, relating to the Plan. No amounts were expensed for
professional fees related to the Plan in 1997. 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 the 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 this 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.
-10-
<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 1996 and recognized no
interest expense for the year ended December 31, 1997. It is
expected that no interest expense will be recorded through the
maturity of the loan.
As of December 31, 1997, the principal balance and accrued interest
on the UDAG Loan were $6,941,553 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 ("Northern Trust") 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 Northern Trust
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, Northern
Trust released its security for its loan. As of December 31,
1997, all accrued interest related to the Northern Trust Loan
has been paid.
(f) Garage Land - On March 14, 1984, the Operating Partnership
purchased an adjoining parcel of land for 2,700,000. As
part of the purchase agreement, the Operating Partnership
has entered into a management agreement with the seller,
Van Buren Company ("VBC"), to manage the garage operations
for an initial term of 25 years plus, at VBC's option,
three 25-year renewal terms. VBC will be paid a management
fee of $7,500 to $10,000 plus a percentage of net income
(as defined) from garage operations. The Operating
Partnership had pledged a $1,400,000 standby letter of
credit to VBC to secure the Operating Partnership's
obligations under the management agreement. As of January
1, 1995, the standby letter of credit was decreased to
$500,000. This management agreement was not modified by
the Plan.
-11-
<PAGE>
3. INVESTMENT IN OPERATING PARTNERSHIP (CONTINUED
(g) 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, was admitted as a partner of the Operating
Partnership with an initial capital contribution of $1,000,
which was made in 1997. 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.
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 (5) 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, 1997 and 1996 is summarized as follows:
<TABLE>
<CAPTION>
1997 1996
<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>
-12-
<PAGE>
3. INVESTMENT IN OPERATING PARTNERSHIP (CONTINUED)
(g) Operating Partnership Agreement (as Amended and Restated)
(Continued) - 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 $0.
The financial statements of the Operating Partnership as of December
31, 1997 and 1996 and for the years then ended are as follows:
<TABLE>
<CAPTION>
Balance Sheets 1997 1996
<S> <C> <C>
Assets:
BUILDING AND IMPROVEMENTS, net of
accumulated depreciation of $51,843,194 and
$48,573,159 in 1997 and 1996, respectively $ 73,675,646 $ 74,926,228
LAND 8,675,000 8,675,000
OTHER ASSETS, net of accumulated
amortization of $17,240,344 and 22,662,429 25,922,015
$16,432,674 in 1997 and 1996, respectively ------------- -------------
TOTAL ASSETS $ 105,013,075 $ 109,523,243
============== =============
Liabilities and Partners' Deficit:
LIABILITIES:
Mortgage and construction notes payable $ 190,315,108 $ 188,145,212
Other liabilities 55,104,258 53,575,276
$16,432,674 in 1997 and 1996, respectively ------------- -------------
245,419,366 241,720,488
PARTNERS' DEFICIT (140,406,291) (132,197,245)
$16,432,674 in 1997 and 1996, respectively ------------- -------------
TOTAL LIABILITIES AND PARTNERS' DEFICIT $ 105,013,075 $ 109,523,243
============== =============
</TABLE>
-13-
<PAGE>
3. INVESTMENT IN OPERATING PARTNERSHIP (CONTINUED)
(g) Operating Partnership Agreement (as Amended and Restated) (Continued)
<TABLE>
<CAPTION>
Statements of Operations 1997 1996
<S> <C> <C>
REVENUES:
Rental income $ 28,009,125 $ 28,199,557
Interest and other income 1,829,040 1,759,445
$16,432,674 in 1997 and 1996, respectively ------------- ------------
29,838,165 29,959,002
$16,432,674 in 1997 and 1996, respectively ------------- ------------
EXPENSES:
Depreciation and amortization 4,077,705 4,049,050
Interest expense 19,238,645 19,031,074
Other expenses 14,731,861 14,530,047
$16,432,674 in 1997 and 1996, respectively ------------- ------------
38,048,211 37,610,171
$16,432,674 in 1997 and 1996, respectively ------------- ------------
NET LOSS BEFORE REORGANIZATION ITEMS (8,210,046) (7,651,169)
REORGANIZATION ITEMS:
Gain on debt restructuring - 180,000
Professional fees - (3,169)
$16,432,674 in 1997 and 1996, respectively ------------- -------------
NET LOSS $ (8,210,046) $ (7,474,338)
============= ============
NET LOSS ALLOCATED TO ONE FINANCIAL
PLACE LIMITED PARTNERSHIP $ (8,127,125) $ (7,399,594)
============= ============
NET LOSS ALLOCATED TO OTHER PARTNERS $ (82,921) $ (74,744)
============= ============
</TABLE>
-14-
<PAGE>
4. ESTIMATED LOSSES FOR INCOME TAX PURPOSES
The Partnership's estimated losses for income tax purposes for 1997 and
1996 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 1997 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 1997 is an
estimate and is subject to change. The estimated losses for income tax
purposes for 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Net loss for financial reporting purposes $ (326,500) $ (311,504)
Add expenses accrued and payable to related parties
not deductible until year of payment for tax purposes 250,000 250,000
Deduct equity in Operating Partnership's tax loss in
excess of financial statement loss (10,152,640) (10,417,636)
------------- -------------
Losses for income tax purposes $ (10,229,140) $ (10,479,140)
============= =============
</TABLE>
5. RELATED-PARTY TRANSACTIONS
Related-party transactions with Winthrop Financial and its affiliates
include the following:
Expenses for 1997 and 1996 include management fees of $250,000 per
year payable to Winthrop Financial.
At December 31, 1997 and 1996, fees payable to related parties
included professional fees and other advances payable to Winthrop
Financial of $322,091 and $245,590, respectively.
Fees payable to related party included management fees of $2,500,000
and $2,250,000 as of December 31, 1997 and 1996, respectively.
6. GOING CONCERN UNCERTAINTY
The Operating Partnership's recurring net losses, partners' deficit,
limited availability of additional capital and approaching maturity date
of its mortgage notes payable, note payable - UDAG and bank loan
payable, raise substantial doubt about its ability to continue as a
going concern. If the Operating Partnership is unable to pay amounts due
under mortgage notes payable at the October 1, 1998 due date, the holder
of the mortgage notes will have the right to foreclose on the Operating
Partnership's real estate and related assets.
-15-
<PAGE>
6. GOING CONCERN UNCERTAINTY (CONTINUED)
During the past two years, management of the Operating Partnership and
the partners have pursued, primarily with well capitalized Real Estate
Investments Trusts, additional capital to facilitate a restructuring of
the Operating Partnership's mortgage notes payable, with the principal
goal to defer any potential foreclosure action. Because of the
substantial excess of debt balance above the property's market value and
the mortgage holders' reluctance to discuss a discounted debt payoff, no
progress has been made to date. Recently, because of increasing office
rental rates and property values, prospects for a debt restructuring
have improved; however, there is no assurance that such a debt
restructuring will occur prior to the October 1, 1998 due date of the
mortgage notes payable.
In that the Partnership was created solely for the purposes of acquiring
and holding for investment a general partnership interest in the
Operating Partnership and whereas the primary business of the Operating
Partnership is to own and operate the Project, the potential foreclosure
against the underlying office tower also raises significant doubts about
the Partnership's ability to continue as a going concern.
* * * * * *
-16-
<PAGE>
Item 8. Disagreements with Accountants on Accounting and Financial Disclosure.
None.
-17-
<PAGE>
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, 1998, 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 an Officer or
Name and Age Managing General Partner Director Since
- ------------ ------------------------ --------------
Michael L. Ashner Chief Executive Officer 1-96
and Director
Edward Williams Chief Financial Officer 4-96
Vice President and
Treasurer
Peter Braverman Senior Vice President 1-96
and Director
Carolyn Tiffany Vice President and Clerk 10-95
Michael L. Ashner, age 46, 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.
Edward V. Williams, age 57 , 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.
18
<PAGE>
Peter Braverman, age 46, has been a Senior Vice President of WFA since
January 1996 and a Director since October 28, 1997. 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.
Carolyn Tiffany, age 31, has been employed with WFA since January 1993.
From 1993 to September 1995, Ms. Tiffany was a Senior Analyst and Associate in
WFA's accounting and asset management departments. From October 1995 to present
Ms. Tiffany has been a Vice President in the asset management and investor
relations departments of WFA.
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; 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; and Winthrop
Miami Associates 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
19
<PAGE>
director, officer, 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").
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.
20
<PAGE>
(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.
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, 1996 and 1997. As
of the December 31, 1997, Winthrop had accrued a total of $2,500,000 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, 1996
or 1997.
Item 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
21
<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, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature/Name Title Date
/s/ Michael L. Ashner Chief Executive March 29, 1998
- ---------------------
Michael L. Ashner Officer and Director
/s/ Edward V. Williams Chief Financial Officer March 29, 1998
- ---------------------
Edward V. Williams
/s/ Peter Braverman Senior Vice President March 29, 1998
- --------------------- and Director
Peter Braverman
22
<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)
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
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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(i) 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, 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)
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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)
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(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.
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(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.
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