<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, 1998 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
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /x/ No /_/
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-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". Under the Operating Partnership's Plan of Reorganization (the
"Plan"), which is more fully described below, each of the Registrant, the
Development Partners 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 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
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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, 1999, only the Registrant has
become a general partner of New LP.
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. The Operating Partnership, however, defaulted on its
debt in October 1998 and no work-out of the default was able to be negotiated
and the lender commenced foreclosure proceedings. As a result, it is anticipated
that the Property will be lost through foreclosure prior to the end of 1999.
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") which LP Notes were subsequently
fully satisfied. 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
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"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 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"), after extensive
negotiations, 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 modified 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.
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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.
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 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, excluding No change
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 to No change
Development Partners and MSE (all but $4.4 million
of this priority has already been distributed)
</TABLE>
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<TABLE>
<S> <C> <C>
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
50% of any distributions to Registrant under distributions to Registrant under Third and Fourth above
Third above
Sixth: The balance, 50% to Registrant and 50% to The balance, 99% to Newco LP 1% to Newco
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 Operating Partnership defaulted on the Travelers Loan at its
maturity on October 1, 1998. The Managing General Partner and the Development
Partners are continuing to negotiate with Travelers in an effort to again
restructure the Travelers Loan. However, it is expected that any such
restructuring will ultimately result in a loss of all or a portion of the
Registrant's interest in the Property. If a restructuring of the
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Travelers Loan cannot be obtained, it is expected that the Property will be lost
through foreclosure in 1999.
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.
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.
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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, 1999, there were 627 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, 1998 and 1997. 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 1998, in the aggregate amount of
$393,832, including $71,741 in 1998 and $76,501 in 1997, and has, through 1998,
deferred $2,750,000 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 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 market, has been affected by the market downturn. After extensive
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negotiations, the Operating Partnership was unable to sell or refinance the
Property or negotiate a work-out agreement with the lender prior to the loans
maturity in October 1998. As a result, the lender is currently in the process of
foreclosing on the Property. It is expected that the foreclosure will occur in
the near future. Accordingly, 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.
Results of Operations
The results of operations in 1998 did not differ significantly from
those in 1997. 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
1998. The Registrant did not receive any revenues in 1998 or 1997. 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.
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.
Year 2000
The Year 2000 Issue is the result of computer programs being written
using two digits rather than four to define the applicable year. The Registrant
is dependent upon the General Partner and its affiliates for management and
administrative services. Any computer programs or hardware that have
date-sensitive software or embedded chips may recognize a date using "00" as the
year 1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary
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inability to process transactions, send invoices, or engage in similar normal
business activities.
During the first half of 1998, the General Partner and its affiliates
completed their assessment of the various computer software and hardware used in
connection with the management of the Registrant. This review indicated that
significantly all of the computer programs used by the General Partner and its
affiliates are off-the-shelf "packaged" computer programs which are easily
upgraded to be Year 2000 compliant. In addition, to the extent that custom
programs are utilized by the General Partner and its affiliates, such custom
programs are Year 2000 compliant.
Following the completion of its assessment of the computer software and
hardware, the General Partner and its affiliates began upgrading those systems
which required upgrading. To date, significantly all of these systems have been
upgraded. The Registrant has to date not borne, nor is it expected that the
Registrant will bear any significant cost, in connection with the upgrade of
those systems to requiring remediation. It is expected that all systems will be
remediated, tested and implemented during the first half of 1999.
To date, the General Partner is not aware of any external agent with a
Year 2000 issue that would materially impact the Registrant's results of
operations, liquidity or capital resources. However, the General Partner has no
means of ensuring that external agents will be Year 2000 compliant. The General
Partner does not believe that the inability of external agents to complete their
Year 2000 resolution process in a timely manner will have a material impact on
the financial position or results of operations of the Registrant. However, the
effect of non-compliance by external agents is not readily determinable.
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Item 7. Financial Statement.
ONE FINANCIAL PLACE LIMITED PARTNERSHIP
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
INDEPENDENT AUDITORS' REPORT 13
FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997:
Balance Sheets 14
Statements of Operations 15
Statements of Changes in Partners' Deficit 16
Statements of Cash Flows 17
Notes to Financial Statements 18-24
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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, 1998 and 1997, 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, 1998 and 1997, 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, 1998 have
been prepared assuming the Partnership will continue as a going concern. As
discussed in Note 5 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, the current
defaults on the mortgage loans payable, and notification of intended
foreclosure, 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 5. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
March 16, 1999
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
ASSETS 1998 1997
----------- -----------
CASH $ 11 $ 19
----------- -----------
TOTAL ASSETS $ 11 $ 19
=========== ===========
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES - Fees payable - related parties $ 3,143,832 $ 2,822,091
----------- -----------
Total liabilities 3,143,832 2,822,091
----------- -----------
PARTNERS' DEFICIT:
Limited partners, 550 units authorized and
outstanding (see Note 1) 1,213,418 1,528,732
General partners (4,357,239) (4,350,804)
----------- -----------
Total partners' deficit (3,143,821) (2,822,072)
----------- -----------
TOTAL LIABILITIES AND PARTNERS' DEFICIT $ 11 $ 19
=========== ===========
See notes to financial statements.
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
1998 1997
--------- ---------
EXPENSES:
General and administrative $ 1,983 $ 2,288
Professional fees 69,766 74,212
Management fees 250,000 250,000
--------- ---------
Total expenses 321,749 326,500
--------- ---------
NET LOSS (321,749) (326,500)
NET LOSS ALLOCATED TO GENERAL
PARTNERS (6,435) (6,530)
--------- ---------
NET LOSS ALLOCATED TO LIMITED
PARTNERS $(315,314) $(319,970)
========= =========
NET LOSS PER UNIT OF INVESTOR LIMITED
PARTNERSHIP INTEREST $ (573) $ (582)
========= =========
NUMBER OF INVESTOR LIMITED PARTNER UNITS
OUTSTANDING 550 550
========= =========
See notes to financial statements.
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Investor
Limited Special Total
Partners Limited General Partners'
(Note 1) Partner Partners Deficit
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1997 $ 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)
Net loss (315,282) (32) (6,435) (321,749)
----------- ----------- ----------- -----------
BALANCE, DECEMBER 31, 1998 $ 1,221,350 $ (7,932) $(4,357,239) $(3,143,821)
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(321,749) $(326,500)
Adjustment to reconcile net loss to net cash (used in) provided by
operating activities -
Changes in assets and liabilities - increase in fees payable - related
parties 321,741 326,501
--------- ---------
Net cash (used in) provided by operating activities (8) 1
--------- ---------
NET (DECREASE) INCREASE IN CASH (8) 1
CASH, BEGINNING OF YEAR 19 18
--------- ---------
CASH, END OF YEAR $ 11 $ 19
========= =========
</TABLE>
See notes to financial statements.
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
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 (the "ILP"), 2% to
the General Partners and .01% to the Special Limited Partner. The Investor
Limited Partner equity balance of $1,221,350 is that amount allocable to
the ILP based upon the terms of the Investor Limited Partnership Agreement.
Given the net deficit balance and the impending foreclosure, it is highly
unlikely that distributions will be available to satisfy such balances.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 been written down to zero.
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.
Syndication Costs - Each limited partner's capital account has been reduced
by its pro rata share of syndication costs incurred by the Partnership.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
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3. LOSSES FOR INCOME TAX PURPOSES
The Partnership's losses for income tax purposes for 1998 and 1997 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 losses for income tax purposes are as follows:
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Net loss for financial reporting purposes $ (321,749) $ (326,500)
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 (11,566,048) (13,757,077)
------------ ------------
Losses for income tax purposes $(11,637,797) $(13,833,577)
============ ============
</TABLE>
4. RELATED-PARTY TRANSACTIONS
Related-party transactions with Winthrop Financial and its affiliates
include the following:
Expenses for 1998 and 1997 include management fees of $250,000 per year
payable to Winthrop Financial.
At December 31, 1998 and 1997, fees payable to related parties included
professional fees and other advances payable to Winthrop Financial of
$393,832 and $322,091, respectively.
Fees payable to related parties included management fees of $2,750,000 and
$2,500,000 as of December 31, 1998 and 1997, respectively.
5. GOING CONCERN UNCERTAINTY
The Operating Partnership's recurring net losses, partners' deficit,
limited availability of additional capital, current defaults on the
mortgage notes payable, note payable - UDAG and bank loan payable and
notification of intended foreclosure raise substantial doubt about its
ability to continue as a going concern. 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. Management
will continue to evaluate alternative actions, however, notification of
intended foreclosure has been served by the mortgage lender. At this time,
it would appear that the Project will be lost through foreclosure prior to
the end of 1999.
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.
19
<PAGE>
6. INVESTMENT IN OPERATING PARTNERSHIP (UNAUDITED)
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 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, Urban Development Action Grant Loan ("UDAG Loan") and Northern Trust
Loan, all of which are discussed on the following pages.
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
had believed the terms of the Plan would have enabled 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, which are currently past due, is uncertain
(Note 5). 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.
During 1997, the maturity dates of both parts of the First Mortgage
Loan were extended to October 1, 1998. On that date, the Operating
Partnership failed to pay the mortgage balance due and fell into
default. Notification of intended foreclosure has been served by
Travelers. The limited availability of additional capital to the
Operating Partnership would appear to make such proceedings
inevitable.
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 a rate equal to the
equivalent interest yield for United States Treasury bills or notes
which mature on October 1, 1998 plus 250 basis points. through
December 31, 1998. 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.
20
<PAGE>
6. INVESTMENT IN OPERATING PARTNERSHIP (UNAUDITED) (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")
was 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.
During 1997, the maturity date of the Second Mortgage was also
extended to October 1, 1998. As with the First Mortgage, the Operating
Partnership failed to make the required payments to the mortgage
holder on that date and fell into default on the Second Mortgage.
Ultimately, it would appear that foreclosure proceedings on this note
are also inevitable.
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 a rate equal to the equivalent
interest yield for United States Treasury bills or notes which mature
on October 7, 1998 plus 250 basis points through December 31, 1998.
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.
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.
21
<PAGE>
6. INVESTMENT IN OPERATING PARTNERSHIP (UNAUDITED) (CONTINUED)
(c) Accrual Account and Other Plan Provisions - 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, 1998, 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.
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.
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 was changed by
the Plan to October 1, 1998 from September 30, 1995. As of that date,
the Operating Partnership fell into default on the UDAG Loan.
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.
22
<PAGE>
6. INVESTMENT IN OPERATING PARTNERSHIP (UNAUDITED) (CONTINUED)
(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. During 1997, the maturity date of the
Northern Trust Loan was changed by the Plan to October 1, 1998. As of
that date, the Operating Partnership fell into default on this
obligation. Under the Plan, Northern Trust released its security for
its loan.
(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.
(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.
23
<PAGE>
6. INVESTMENT IN OPERATING PARTNERSHIP (UNAUDITED) (CONTINUED)
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 is
summarized as follows:
1998 1997
------------ ------------
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)
------------ ------------
$ -- $ --
============ ============
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.
* * * * * *
24
<PAGE>
Item 8. Disagreements with Accountants on Accounting and Financial Disclosure.
None.
27
<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, 1999, 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 Managing General Partner Officer Since
- ---- ------------------------ -------------
Michael L. Ashner Chief Executive Officer 1-96
and Director
Thomas C. Staples Chief Financial Officer 1-99
Peter Braverman Executive Vice President 1-96
and Director
Patrick J. Foye Vice President - Residential 10-98
and Director
Carolyn Tiffany Chief Operating Officer 10-95
and Clerk
Michael L. Ashner, age 46, has been the Chief Executive Officer of
Winthrop Financial Associates, A Limited Partnership ("WFA") and the Managing
General Partner 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.
Thomas C. Staples, age 43, has been the Chief Financial Officer of WFA
since January 1, 1999. From March 1996 through December 1998, Mr. Staples was
Vice President/Corporate Controller of WFA. From May 1994 through February 1996,
Mr. Staples was the Controller of the Residential Division of Winthrop
Management.
28
<PAGE>
Peter Braverman, age 47, has been a Vice President of WFA and the
Managing General Partner 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.
Patrick J. Foye, age 41, has been Vice President-Residential and
Director of the Managing General Partner since October 1, 1998. Mr. Foye has
served as Executive Vice President of Apartment Investment and Management
Company ("AIMCO") since May 1998. Prior to joining AIMCO, Mr. Foye was a partner
in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to 1998
and was Managing Partner of the firm's Brussels, Budapest and Moscow offices
from 1992 through 1994. Mr. Foye is also Deputy Chairman of the Long Island
Power Authority and serves as a member of the New York State Privatization
Council. He received a B.A. from Fordham College and a J.D. from Fordham
University Law School.
Carolyn Tiffany, age 32, 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. Ms. Tiffany was a Vice
President in the asset management and investor relations departments of WFA from
October 1995 to December 1997, at which time she became the Chief Operating
Officer 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
29
<PAGE>
Limited Partnership; and Southeastern Income Properties II 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, 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.
30
<PAGE>
(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.
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, 1997 and 1998. As
of the December 31, 1998, Winthrop had accrued a total of $2,750,000 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, 1997
or 1998.
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
31
<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: April 14, 1999
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 April 14, 1999
- --------------------- Officer and Director
Michael L. Ashner
/s/ Thomas Staples Chief Financial Officer April 14, 1999
- ---------------------
Thomas Staples
/s/ Peter Braverman Executive Vice President April 14, 1999
- --------------------- and Director
Peter Braverman
32
<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 National Bank of
Boston, as Lenders, Chemical Bank, as
33
<PAGE>
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)
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)
34
<PAGE>
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)
- ----------
(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.
35
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from audited financial statements for the
twelve month period ending December 31, 1998 and is
qualified in its entirety by reference to such financial
statements
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<CASH> 11
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 11
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> (3,143,821)
<TOTAL-LIABILITY-AND-EQUITY> 11
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 319,766
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (321,749)
<INCOME-TAX> 0
<INCOME-CONTINUING> (321,749)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (321,749)
<EPS-PRIMARY> (573.30)
<EPS-DILUTED> (573.30)
</TABLE>
