SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) November 30, 1995
REALTY SOUTHWEST FUND III, LTD.
(Exact name of registrant as specified in its charter)
Texas 0-14459 76-0113542
(State or other jurisdiction) (Commission (IRS Employer
of incorporation File Number) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
(Former name or address, if changed since last report)
FORM 8-K
CURRENT REPORT
REALTY SOUTHWEST FUND III, LTD.
ITEM 2 - DISPOSITION OF ASSETS
Summerview Apartments, Atlanta, GA
Disposition Date - November 30, 1995
Effective November 30, 1995, Realty Southwest III, Ltd. (the "Partnership") sold
its joint venture interest in the Summerview Apartments to its co-venture
partner for $25,000 as part of a formal liquidation of the Partnership currently
underway. While Summerview Apartments is currently operating in compliance with
the mortgage debt agreement, cash flow from operations does not fully cover the
current debt service requirements. For the past few years, the venture has
struggled to remain current on its debt service obligations by extending the
payment periods on its trade payables and deferring certain property maintenance
expenses. During fiscal 1995, the Partnership's co-venture partner contributed
approximately $40,000 to the venture because there was not sufficient cash to
make a required real estate tax payment. Although the venture remained in
compliance with its debt service obligations during fiscal 1995, cash flow
deficits continued during the current fiscal year and have resulted in a
technical default under the first mortgage loan agreement. Analysis of the
property's operating cash flow indicated that the current and future value of
the property is substantially below the principal balance of the debt. As a
result of the above conditions, management believed that it was in the Limited
Partners best interest to sell the Partnership's interest in the Summerview
Associates, LTD. to its co-venture partner.
As previously reported, due to the depressed economic conditions and a real
estate recession unparalleled in recent history, ten of the Partnership's
original twelve investment properties, representing 84% of the original
investment portfolio, have been acquired through foreclosure actions by their
respective lenders, transferred or sold with no significant return on invested
capital to the Limited Partners to date. The respective debt balances on the
two remaining real estate assets (including Summerview Apartments) greatly
exceed the market value of the real estate collateral. The Partnership's
ability to recover any portion of its investment in these properties was
dependent on achieving significant discounts from the lenders. Despite every
effort to restructure these loans, the lenders have been unwilling to make the
necessary debt modification on satisfactory economic terms. As a result, and in
light of the Partnership's limited cash reserves, management concluded that the
costs of continued operations outweigh the limited opportunities for any future
recoveries of invested capital, that a current liquidation of the Partnership
would be in the best interest of the Limited Partners and has begun a formal
liquidation of Realty Southwest Fund III, Ltd.
ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements: None
(b) Exhibits:
(1) Assignment of Partnership Interest in Summerview Associates,
LTD., by and among Realty Southwest Fund III, Ltd. (the "Assignor"),
Marro Associates, L.L.C. (the "Assignee"), and George H. Lane, III
(the "General Partner").
FORM 8-K
CURRENT REPORT
REALTY SOUTHWEST FUND III, LTD.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REALTY SOUTHWEST III, LTD.
(Registrant)
By:/s/ Walter V. Arnold
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
December 21, 1995
exhibit 1.
ASSIGNMENT OF PARTNERSHIP INTEREST IN
SUMMERVIEW ASSOCIATES, LTD.,
A GEORGIA LIMITED PARTNERSHIP
This Assignment, made effective as of the 22nd day of June, 1995, by and
among REALTY SOUTHWEST FUND III, LTD., a Texas limited partnership (the
"Assignor"), owner of a general partner interest in SUMMERVIEW ASSOCIATES, LTD.,
a Georgia limited partnership (the "Partnership"), MARRO ASSOCIATES, L.L.C.
("Assignee") and GEORGE H. LANE, III ("General Partner").
W I T N E S S E T H :
WHEREAS, Assignor is the owner of a general partner interest ("Interest")
in the Partnership and desires to assign, transfer and set over the Interest to
the Assignee; and
WHEREAS, Assignee desires to acquire Assignor's Interest, and thereafter to
hold the Interest as a general partner; and
WHEREAS, the General Partner desires to evidence his consent to such
assignment by joining in the execution hereof and to enter into certain
agreements with the Assignor regarding the Interest;
NOW, THEREFORE, for the sum of $25,000 plus other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged by
Assignor and in consideration of the premises and mutual benefits to be derived
herefrom it is agreed as follows:
1. Assignor hereby assigns, transfers and sets over the Interest unto the
Assignee, without recourse, and without representation or warranty, expressed or
implied or created by operation of law, except for those specifically set forth
in this Assignment. Assignor warrants and represents to Assignee that Assignor
owns legal title to the Interests, that the Interest has not been pledged,
assigned or optioned to any other party, that Assignor has the full authority to
execute this Assignment and that no further consent from Assignor shall be
necessary to vest full legal title in the Interest in Assignee.
2. The Assignee hereby accepts and adopts the terms and provisions of the
Agreement of Limited Partnership of the Partnership (the "Agreement"), as
amended.
3. The Assignee, in its capacity as a general partner of the Partnership,
further hereby assumes, as of the effective date of this Assignment, all
obligations of Assignor under the Agreement, as a general partner of the
Partnership, existing or arising as of or subsequent to the date hereof,
including, but not limited to, Assignor's liability, as a general partner of the
Partnership, to existing and future creditors of the Partnership, taxing
authorities having claims for taxes against the Partnership and claimants in
tort, contract and equity having a claim against the Partnership.
4. The General Partner agrees that this Assignment is fully effective
under the conditions of the Agreement and hereby consents to his capacity as a
General Partner and as the sole limited partner to the substitution, as to the
Interest, of the Assignee, as a general partner in the Partnership.
5. The Assignee and the General Partner agree to indemnify and hold
harmless the Assignor from any and all claims, losses, costs and expenses
arising out of this Assignment and Assignee's failure to discharge the
obligations assumed by Assignee under this Assignment and to any breach of
Assignee's agreements under this Assignment.
6. The Assignee and General Partner agree to perform any and all acts
which may be required by the laws of the State of Georgia and any governmental
authority in the State of Georgia with jurisdiction over the Partnership with
respect to the withdrawal of a general partner from a partnership doing business
in Georgia.
7. The parties hereto agree that in the event any party to this
Assignment brings a claim against one or more parties to this Assignment
alleging a breach of any representation, warranty, or covenant contained in this
Assignment, the party or parties which are adjudged to have caused any such
breach (the "Responsible Party") shall be fully liable therefor to the parties
bringing such action for all claims, damages, taxes, or liabilities of any kind
and, if there be more than one Responsible Party, such liability shall be joint
and several. Any Responsible Party shall have no rights of contribution,
indemnity or subrogation against any party to this Assignment which is not a
Responsible Party, all such rights being hereby irrevocably waived, and each
Responsible Party shall indemnify and hold harmless any party to this Assignment
that is not a Responsible Party from any and all claims, damages, or liabilities
of any kind based upon any breach hereof which has been adjudged to have been
caused by such Responsible Party.
8. This Assignment is binding upon and shall inure to the benefit of the
parties hereto, their heirs, legal representatives, successors, and assigns.
EXECUTED by Assignor as of the 22nd day of June, 1995.
REALTY SOUTHWEST FUND III, LTD.,
a Texas limited partnership
By:/s/ John B. Watts III
Name: John B. Watts III
Title: Senior Vice President
EXECUTED by Assignee as of this 15th day of March, 1995.
MARRO ASSOCIATES, L. L. C.
By:/s/ Marc S. Pollack
Marc S. Pollock, Manager
EXECUTED by George H. Lane, III as of this 15th day of March, 1995.
/s/ George H. Lane, III
GEORGE H. LANE, III, as a general
partner and as a limited partner
