FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 0-14248
ANGELES PARTNERS XIV
(Exact name of small business issuer as specified in its charter)
California 95-3959771
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (803) 239-1000
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) ANGELES PARTNERS XIV
BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
September 30, 1995
<S> <C> <C>
Assets
Cash:
Unrestricted $ 315,791
Restricted--tenant security deposits 104,366
Accounts receivable, (net of allowance for
doubtful accounts of $42,383) 28,692
Escrows deposits for taxes 410,443
Restricted escrows 278,884
Other assets 897,649
Investment properties:
Land $ 4,164,166
Buildings and related personal 48,710,446
52,874,612
Less accumulated depreciation (26,300,395) 26,574,217
$ 28,610,042
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 71,997
Tenant security deposits 139,765
Accrued taxes 526,795
Accrued interest 3,450,458
Due to affiliates 713,956
Other liabilities 192,315
Notes payable, including $13,229,636
in default 48,219,514
Partners' Deficit
General partners $ (630,406)
Limited partners (44,139 units
issued and outstanding) (24,074,352) (24,704,758)
$ 28,610,042
</TABLE>
[FN]
See Accompanying Notes to Financial Statements
b) ANGELES PARTNERS XIV
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 1,979,341 $ 2,154,414 $ 5,956,149 $ 6,640,311
Other income 42,442 15,221 180,726 141,761
Total revenue 2,021,783 2,169,635 6,136,875 6,782,072
Expenses:
Operating 306,551 445,888 1,235,771 1,481,176
General and administrative 69,506 52,032 210,339 275,679
Property management fees 92,413 72,586 271,844 307,073
Maintenance 169,333 168,266 455,077 524,919
Depreciation 694,537 808,380 2,138,748 2,402,776
Amortization 52,336 53,419 106,555 145,184
Interest 1,580,893 1,507,535 4,488,614 4,988,269
Property taxes 109,058 144,176 324,526 509,041
Bad debt 20,712 -- 20,712 --
Tenant reimbursements (10,292) (18,392) (30,380) (36,639)
Total expenses 3,085,047 3,233,890 9,221,806 10,597,478
Loss before gain on sale
of investment property,
loss on transfer of
property in foreclosure
and loss on disposoal
of property (1,063,264) (1,064,255) (3,084,931) (3,815,406)
Gain on sale of investment
property 78,078 -- 78,078 601,633
Loss on transfer of
property in foreclosure -- -- -- (570,258)
Loss on disposal of
property -- (33,203) -- (33,203)
Loss before extraordinary
item (985,186) (1,097,458) (3,006,853) (3,817,234)
Extraordinary item - gain
on early extinguishment
of debt -- (225,000) -- 2,243,515
Net loss $ (985,186) $(1,322,458) $(3,006,853) $(1,573,719)
Net loss allocated to
general partners (1%) $ (9,852) $ (13,225) $ (30,069) $ (15,737)
Net loss allocated to
limited partners (99%) (975,334) (1,309,233) (2,976,784) (1,557,982)
Net loss $ (985,186) $(1,322,458) $(3,006,853) $(1,573,719)
</TABLE>
[FN]
See Accompanying Notes to Financial Statements
ANGELES PARTNERS XIV
STATEMENTS OF OPERATIONS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Per limited partnership
unit:
Loss before extraordinary
item $ (22.10) $ (24.48) $ (67.44) $ (85.13)
Extraordinary item -- (5.02) -- 50.04
Net loss $ (22.10) $ (29.50) $ (67.44) $ (35.09)
</TABLE>
[FN]
See Accompanying Notes to Financial Statements
c) ANGELES PARTNERS XIV
STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital
contributions 44,390 $ 1,000 $ 44,390,000 $ 44,391,000
Partners' deficit at
December 31, 1994 44,139 $(600,337) $(21,097,568) $(21,697,905)
Net loss for the nine months
ended September 30, 1995 -- (30,069) (2,976,784) (3,006,853)
Partners' deficit at
September 30, 1995 44,139 $(630,406) $(24,074,352) $(24,704,758)
</TABLE>
[FN]
See Accompanying Notes to Financial Statements
d) ANGELES PARTNERS XIV
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net loss $(3,006,853) $(1,573,719)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 2,138,748 2,402,776
Amortization of discounts, loan costs, and leasing
commissions 211,191 326,262
Gain on early extinguishment of debt -- (2,243,515)
Gain on sale of investment property (78,078) (601,633)
Loss on disposal of property -- 33,203
Loss on transfer of property in forecloure -- 570,258
Bad debt 20,712 --
Change in accounts:
Restricted cash (4,453) (8,959)
Accounts receivable (1,761) (61,532)
Escrows for taxes (31,892) 312,346
Other assets (130,768) (218,902)
Accounts payable (17,626) 36,087
Tenant security deposit liabilities (32,569) 7,963
Accrued taxes (23,779) (16,935)
Accrued interest 1,990,206 --
Due to affiliates 129,541 --
Other liabilities 6,826 2,508,273
Net cash provided by operating activities 1,169,445 1,471,973
Cash flows from investing activities:
Property improvements and replacements (248,141) (597,748)
Proceeds from sale of investment property 4,095,964 6,129,897
Deposits to restricted escrows (89,906) (80,915)
Withdrawals from restricted escrows 83,639 65,697
Net cash provided by investing activities 3,841,556 5,516,931
Cash flows from financing activities:
Payments on mortgage notes payable (770,622) (1,109,709)
Repayments of loans (4,089,544) (6,101,222)
Cash payment on foreclosure -- (225,000)
Loan cost (67,000) --
Cash distributions to General Partner -- (265)
Additional borrowings 49,141 --
Net cash used in financing activities (4,878,025) (7,436,196)
</TABLE>
[FN]
See Accompanying Notes to Financial Statements
ANGELES PARTNERS XIV
STATEMENT OF CASH FLOWS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
Net increase (decrease) in cash $ 132,976 $ (447,292)
Cash at beginning of period 182,815 513,646
Cash at end of period $ 315,791 $ 66,354
Supplemental disclosure of cash
flow information:
Cash paid for interest $2,306,753 $2,285,816
Interest on notes transferred to
notes payable $ 977,556 $1,229,752
Foreclosures:
During the nine months ended September 30, 1994, Building 57 of the Dayton Industrial
Complex was foreclosed upon by the lender. In connection with the foreclosure, the
following accounts were adjusted by the following non-cash amounts:
Other assets $ (11,850)
Investment properties (1,928,358)
Interest payable 576,808
Mortgages payable 2,325,990
</TABLE>
[FN]
See Accompanying Notes to Financial Statements
e) ANGELES PARTNERS XIV
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Going Concern
The accompanying unaudited financial statements have been prepared assuming
the Partnership will continue as a going concern. The Partnership continues to
suffer from inadequate liquidity and is in default on certain of its debt
obligations due principally to the inability to make payments as due. Limited
sources of additional financing have been identified by the Partnership. The
total amount of debt in default at September 30, 1995, is $13,229,636.
Fox Crest Apartments is in default on its non-recourse first mortgage in the
amount of $6,574,382 due to its maturity in August 1994. The lender has offered
to refinance the debt and the Partnership is negotiating with the lender for
terms with a lower interest rate.
The Dayton Industrial Complex contains seven buildings. The Partnership is
in default on two of its non-recourse first mortgages in the amount of
$2,155,254 due to delinquent taxes of approximately $46,000. The Partnership
plans to pay these taxes during 1995. The Partnership is investigating the
possibility of selling some or all of the buildings at Dayton Industrial
Complex.
The Partnership sold Building 47 of the Dayton Industrial Complex on August
31, 1995. Proceeds from the sale were $4,095,964 which were used to payoff the
first mortgage and pay-down the second mortgage. The Partnership recognized a
gain on the sale of $78,078.
The unsecured indebtedness to Angeles Mortgage Investment Trust ("AMIT") in
the amount of $4,500,000 is in default due to non-payment of interest. The
lender is in the process of initiating negotiations to amend these notes to
require interest only payments based on available cash flow, as defined. The
mortgage secured by Waterford Square Apartments and guaranteed by HUD is
current and is not in default.
As a result of the above, there is substantial doubt about the Partnership's
ability to continue as a going concern. The financial statements do not include
any adjustments to reflect the possible future effects on the recoverability and
classification of assets or amounts and classifications of liabilities that may
result from these uncertainties.
Note B - Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of the Managing General Partner, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the nine month
period ended September 30, 1995, are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 1995. For further
information, refer to the financial statements and footnotes thereto included
in the Partnership's annual report on Form 10-KSB for the fiscal year ended
December 31, 1994.
Certain reclassifications have been made to the 1994 information to conform
to the 1995 presentation.
Note C - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
Partnership activities. The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
The following expenses owed to the Managing General Partner and affiliates
during the nine months ended September 30, 1995 and 1994 were paid or accrued:
1995 1994
Property management fees $271,844 $307,073
Reimbursement for services of affiliates,
(Total of $713,956 and $531,687 accrued
at September 30, 1995 and 1994,
respectively) 129,541 228,693
Marketing services 2,546 1,607
Note C - Transactions with Affiliated Parties (continued)
The Partnership insures its properties under a master policy through an
agency and insurer unaffiliated with the Managing General Partner. An affiliate
of the Managing General Partner acquired, in the acquisition of a business,
certain financial obligations from an insurance agency which was later acquired
by the agent who placed the current year's master policy. The current agent
assumed the financial obligations to the affiliate of the Managing General
Partner, who receives payments on these obligations from the agent. The amount
of the Partnership's insurance premiums accruing to the benefit of the affiliate
of the Managing General Partner by virtue of the agent's obligations is not
significant.
In November 1992, Angeles Acceptance Pool, L.P. ("AAP"), a Delaware limited
partnership was organized to acquire and hold the obligations evidencing the
working capital loans previously provided to the Partnership by Angeles Capital
Investments, Inc. ("ACII"). Angeles Corporation ("Angeles") is the 99% limited
partner of AAP and Angeles Acceptance Directives, Inc.("AAD"), an affiliate of
the Managing General Partner, was, until April 14, 1995, the 1% general partner
of AAP. On April 14, 1995, as part of a settlement of claims between affiliates
of the Managing General Partner and Angeles, AAD resigned as general
partner of AAP and simultaneously received a 1/2% limited partner interest in
AAP. An affiliate of Angeles now serves as the general partner of AAP.
These working capital loans funded the Partnership's operating deficits in
prior years. Total indebtedness was $4,576,493 at September 30, 1995, with
monthly interest accruing at the prime rate plus two percent. Interest is to be
paid based on excess cash flow, as defined. Principal is to be paid the earlier
of i) the availability of funds, ii) the sale of one or more properties owned by
the Partnership, or iii) November 25, 1997. Total interest expense for this
loan was $370,047 and $306,053 for the nine months ended September 30, 1995 and
1994, respectively. Interest of $1,194,857 was accrued at September 30, 1995.
AMIT currently provides notes payable to the Partnership and secondary
financing on one of the Partnership's investment properties. Total indebtedness
of $4,500,000 was in default at September 30, 1995. Total interest expense on
this financing was $672,183 and $444,125 for the nine months ended September
30, 1995 and 1994, respectively. Accrued interest was $2,068,565 at September
30, 1995.
Note C - Transactions with Affiliated Parties (continued)
MAE GP Corporation ("MAE GP"), an affiliate of the Managing General Partner,
owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these
Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class
A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to
receive 1% of the distributions of net cash distributed by AMIT. These Class B
Shares also entitle MAE GP to vote on the same basis as Class A Shares which
allows MAE GP to vote approximately 37% of the total shares (unless and
until converted to Class A Shares at which time the percentage of the vote
controlled represented by the shares held by MAE GP would approximate 1% of the
vote). Between the date of acquisition of these shares (November 24, 1992) and
March 31, 1995, MAE GP declined to vote these shares. Since that date, MAE GP
voted its shares at the 1995 annual meeting in connection with the election of
trustees and other matters. MAE GP has not exerted and continues to decline to
exert any management control over or participate in the management of AMIT.
MAE GP may choose to vote these shares as it deems appropriate in the future.
As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT
an option to acquire the Class B Shares owned by it. This option can be
exercised at the end of 10 years or when all loans made by AMIT to partnerships
affiliated with MAE GP as of November 9, 1994, (which is the date of execution
of a definitive Settlement Agreement), have been paid in full, but in no event
prior to November 9, 1997. AMIT delivered to MAE GP cash in the sum of
$250,000 at closing, which occurred April 14, 1995, as payment for the option.
Upon exercise of the option, AMIT will remit to MAE GP an additional $94,000.
Simultaneously with the execution of the option, MAE GP executed an
irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to
vote the Class B Shares on all matters except those involving transactions
between AMIT and MAE GP affiliated borrowers or the election of any MAE GP
affiliate as an officer or trustee of AMIT. On these matters, MAE
GP will deliver to the AMIT trustees, in their capacity as trustees of
AMIT, proxies with regard to the Class B Shares instructing such trustees to
vote said Class B Shares in accordance with the vote of the majority of the
Class A Shares voting to be determined without consideration of the votes of
"Excess Class A Shares" as defined in Section 6.13 of the Declaration of Trust
of AMIT.
Note C - Transactions with Affiliated Parties (continued)
The Partnership has agreed to pay Miller Valentine Realty ("MV") property
management fees, leasing commissions, and financing fees and sales commissions
upon the refinancing or sale of the properties. The Partnership will receive
the first $3,000,000 of excess cash from operations, refinancing or sales of the
properties. Thereafter, the agreement provides that MV shall receive as
incentive for providing property management, leasing and asset management
services to the Partnership, two-thirds of the next $12,000,000 of excess cash
proceeds generated by the properties. Cash in excess of $15,000,000 shall be
shared equally by MV and the Partnership.
The agreement contemplates that the properties will be sold at an opportune
time but no later than 10 years after commencement of the agreements (March 2,
1992). In addition, the agreement contains an option for MV to buy the
properties five years after the commencement date of the agreement. The
Managing General Partner does not anticipate that there will be any proceeds
available to the Partnership. Should the Partnership elect not to sell, it
would be obligated to purchase MV's incentive interest based on the offered
purchase price. The Partnership intends to maintain ownership of the Dayton
properties only as long as they are under the management of MV. There is no
certainty as to the future of the Dayton properties otherwise.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of two apartment complexes
and one commercial property. The following table sets forth the average
occupancy of the properties for the nine months ended September 30, 1995 and
1994:
Average
Occupancy
Property 1995 1994
Waterford Square Apartments
Huntsville, Alabama (1) 87% 84%
Fox Crest Apartments
Waukegan, Illinois 97% 95%
Dayton Industrial Complex
Dayton, Ohio (2) 86% 94%
(1) This market area has been adversely affected by lay-offs in the aerospace
and defense industries, which are both major employers in the area.
(2) This investment property has been adversely affected by build-up of
commercial space in the area.
The Partnership realized a net loss of $3,006,853 for the nine months ended
September 30, 1995, and a net loss of $1,573,719 for the nine months ended
September 30, 1994. The Partnership realized a net loss of $985,186 for the
three months ended September 30, 1995, and a net loss of $1,322,458 for the
three months ended September 30, 1994. The increased loss for the nine months
ended September 30, 1995 can be attributed to a $601,633 gain on the sale of
Building 64 and 66 of the Dayton Industrial Complex and a $2,243,515 gain on
early extinguishment of debt relating to the sale and the foreclosure of
Building 57 of the Dayton Industrial Complex during the nine months ended
September 30, 1994 (see discussion below).
The Partnership sold Building 47 of the Dayton Industrial Complex on August
31, 1995, Buildings 64 and 66 of the Dayton Industrial Complex on February 18,
1994, and Building 54 of the Dayton Industrial Complex on December 28, 1994.
Also, on June 18, 1994, the Partnership lost Building 57 of the Dayton
Industrial Complex through foreclosure. As a result of these transactions,
the Partnership realized decreases in rental revenues and the following
expenses for the three and nine months ended September 30, 1995, versus the
three and nine months ended September 30, 1994: operating, property management
fees, maintenance, depreciation, amortization, interest and property taxes.
General and administrative expense decreased primarily due to a decrease in
reimbursements for partnership accounting, investor relations and asset
management services. Bad debt expense relates to past-due rents from
tenants of the Dayton Industrial Complex which have been deemed uncollectible.
The increase in other income during the three and nine months ended September
30, 1995, as compared to the three and nine months ended September 30, 1994, is
a result of increased lease cancellation fees, deposits forfeited and other
miscellaneous fees and collections associated with the Foxcrest investment
property. In addition, the Partnership received a $37,500 sales commission
relating to the sale of Building 54.
As mentioned previously, the Partnership sold Building 47 of the Dayton
Industrial Complex on August 31, 1995 and Buildings 64 and 66 of the Dayton
Industrial Complex on February 18, 1994. In addition, on June 18, 1994, the
Partnership lost Building 57 of the Dayton Industrial Complex through
foreclosure. Proceeds from the sale of Building 47 were $4,095,964 which were
used to pay off the first mortgage and pay down the second mortgage.
The Partnership recognized a $78,078 gain on the sale. The net gain on the
sale of Buildings 64 and 66 amounted to $1,537,300 of which $601,633 represented
a net gain on the transfer of property in the sale and $935,667 represented a
net gain on extinguishment of the related debt. The net gain on the foreclosure
of Building 57 amounted to $737,590.
Finally, at September 30, 1994, several roofs at the Fox Crest investment
property were replaced. The Partnership realized a $33,203 loss on the disposal
of property as a result of the write-off of the roofs that were not fully
depreciated.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of each of its investment
properties to assess the feasibility of increasing rents, maintaining or
increasing occupancy levels and protecting the Partnership from increases in
expense. As part of this plan, the Managing General Partner attempts to
protect the Partnership from the burden of inflation-related increases
in expenses by increasing rents and maintaining a high overall occupancy
level. However, due to changing market conditions, which can result in the use
of rental concessions and rental reductions to offset softening market
conditions, there is no guarantee that the Managing General Partner will be able
to sustain such a plan.
At September 30, 1995, the Partnership had unrestricted cash of $315,791
compared to $66,354 at September 30, 1994. Cash provided by operating activities
decreased as a result of an increased net loss, increased escrows for taxes and
a decrease in accounts payable. Cash provided by investing activities decreased
due to decreased proceeds from the sale of investment properties. Offsetting
the decrease in cash flows provided by investing activities was a decrease in
cash used in financing activities. This decrease is related to the repayments
of loans on the sold properties.
The Partnership continues to suffer from inadequate liquidity. In addition,
there are no identified capital resources available to the Partnership, except
those funds that Miller-Valentine Realty has agreed to lend to the Partnership
relating to the Dayton Industrial Complex (see discussion below). As a result,
the Partnership has not had cash available to perform the substantial
rehabilitation necessary at each of the investment properties. As noted above,
the Partnership had one property sold in 1995, one property foreclosed in 1994
and three properties sold in 1994.
Fox Crest Apartments is in default on its non-recourse first mortgage in the
amount of $6,574,382 due to its maturity in August 1994. The lender has offered
to refinance the debt and the Partnership is negotiating with the lender for
terms with a lower interest rate.
The Dayton Industrial Complex contains seven buildings. The Partnership is
in default on two of its non-recourse first mortgages in the amount of
$2,155,254 due to delinquent taxes of approximately $46,000. The Partnership
plans to pay these taxes during 1995. The Partnership is investigating the
possibility of selling some or all of the buildings at Dayton Industrial
Complex.
The unsecured indebtedness to Angeles Mortgage Investment Trust ("AMIT") in
the amount of $4,500,000 is in default due to non-payment of interest. The
lender is in the process of initiating negotiations to amend these notes to
require interest only payments based on available cash flow. The mortgage
secured by Waterford Square Apartments and guaranteed by HUD is current and
is not in default.
MAE GP Corporation ("MAE GP"), an affiliate of the Managing General Partner,
owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these
Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class
A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to
receive 1% of the distributions of net cash distributed by AMIT. These Class B
Shares also entitle MAE GP to vote on the same basis as Class A Shares which
allows MAE GP to vote approximately 37% of the total shares (unless and
until converted to Class A Shares at which time the percentage of the vote
controlled represented by the shares held by MAE GP would approximate 1% of the
vote). Between the date of acquisition of these shares (November 24, 1992) and
March 31, 1995, MAE GP declined to vote these shares. Since that date, MAE GP
voted its shares at the annual meeting in connection with the election of
trustees and other matters. MAE GP has not exerted and continues to decline
to exert any management control over or participate in the management
of AMIT. MAE GP may choose to vote these shares as it deems appropriate in
the future.
As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT
an option to acquire the Class B Shares owned by it. This option can be
exercised at the end of 10 years or when all loans made by AMIT to partnerships
affiliated with MAE GP as of November 9, 1994, (which is the date of execution
of a definitive Settlement Agreement), have been paid in full, but in no
event prior to November 9, 1997. AMIT delivered to MAE GP cash in the sum
of $250,000 at closing, which occurred April 14, 1995, as payment for the
option. Upon exercise of the option, AMIT will remit to MAE GP an additional
$94,000.
Simultaneously with the execution of the option, MAE GP executed an
irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to
vote the Class B Shares on all matters except those involving transactions
between AMIT and MAE GP affiliated borrowers or the election of any MAE GP
affiliate as an officer or trustee of AMIT. On these matters, MAE GP granted
to the AMIT trustees, in their capacity as trustees of AMIT, proxies with regard
to the Class B Shares instructing such trustees to vote said Class B Shares in
accordance with the vote of the majority of Class A Shares voting to be
determined without consideration of the votes of "Excess Class A Shares" as
defined in Section 6.13 of the Declaration of Trust of AMIT.
In March 1992, the Partnership entered into an incentive management agreement
with Miller-Valentine Realty, an Ohio corporation ("MV"). An affiliate of MV
was the original seller of the Dayton Industrial Complex to the Partnership.
Pursuant to the agreement, MV was appointed exclusive leasing agent, property
manager and sales agent for these properties. As part of the agreement, MV
secured the agreement of its affiliate which holds the secured mortgages on
these properties to change their terms to reflect that interest on such debt
will be paid only to the extent of the properties' cash flows, after payment of
operating expenses and senior financing costs. Interest on the second mortgages
that is not paid on a current basis will continue to accrue and will be due upon
sale or refinancing of the properties. Additionally, MV has agreed to lend the
Partnership up to $1,000,000 relating to the Dayton Industrial Complex for
working capital requirements. The balance of such loan proceeds will be used
for capital improvements at the properties, as and when deemed appropriate and
necessary by MV; payment of tenant improvements necessary for leasing
space; and to cover any shortfalls in operating expenses or debt service
payments. The balance under this arrangement is $328,635 at September 30, 1995.
It is questionable whether MV will fund the remainder. The loan will bear
interest at 10% per annum with principal and interest payments deferred until
all necessary repairs, expenses and other arrearages have been fully funded and
anticipated income from the properties appears sufficient so that all
operating expenses, real estate taxes, and debt service can continue to be paid
timely. This loan will be secured by the properties, but is nonrecourse to any
other assets of the Partnership. MV will also attempt to refinance the
properties and has secured the agreement of the holder of the second mortgages
on the properties to be subordinate to any such refinancing.
The Partnership has agreed to pay MV property management fees, leasing
commissions, financing fees and sales commissions upon the refinancing or sale
of the properties. The Partnership will receive the first $3,000,000 of
excess from operations, refinancing or sales of the properties. Thereafter,
the agreement provides that MV shall receive as incentive for providing property
management, leasing and asset management services to the Partnership, two-thirds
of the next $12,000,000 of excess cash proceeds generated by the
properties. Cash in excess of $15,000,000 shall be shared equally by MV and the
Partnership.
The agreement contemplates that the properties will be sold at an opportune
time but no later than 10 years after commencement of the agreement (March 2,
1992). In addition, the agreement contains an option for MV to buy the
properties five years after the commencement date of the agreement. Should
the Partnership elect not to sell, it would be obligated to purchase MV's
incentive interest based on the offered purchase price. The Partnership
intends to maintain ownership of the Dayton properties only as long as they
are under the management of MV. There is no certainty as to the future of the
Dayton properties otherwise.
As a result of the above, there is substantial doubt about the Partnership's
ability to continue as a going concern. The financial statements do not include
any adjustments to reflect the possible future effects on the recoverability and
classification of assets or amounts or classification of liabilities that may
result from the outcome of these uncertainties.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
AMIT, an affiliate of the Managing General Partner, made a loan to the
Partnership on August 28, 1991, in the amount of $3,000,000, secured by the
Partnership's real property known as Fox Crest Apartments, on a non-recourse
basis. AMIT now asserts that the loan is recourse by virtue of a certain
amendment purportedly entered into as of November 1, 1992, but which the
Partnership has been informed and believes was actually executed in December
of 1992 ("Note Modification"). The Partnership has been further informed and
believes that the amendment may have been executed at the direction of Angeles
by an individual in his purported capacity as an officer of the Managing General
Partner of the Partnership at a time when such person was not in fact an officer
of such entity. Accordingly, the Partnership filed a Proof of Claim in the
Angeles bankruptcy proceeding with respect to such purported amendment.
Additionally, the Partnership filed a Proof of Claim in the Angeles Funding
Corporation and Angeles Real Estate Corporation bankruptcy proceedings on
similar grounds. Both Angeles Funding Corporation and Angeles Real Estate
Corporation are affiliates of Angeles. Subsequently, Angeles agreed to
cooperate with the Partnership in any action commenced by or against them by
AMIT asserting that the $3,000,000 obligation owed to AMIT is recourse to the
Partnership. Angeles further agreed to waive the attorney-client privilege with
respect to any information relating to the Note Modification. Accordingly, the
Partnership withdrew its claim on August 9, 1995. The Partnership has been
in and continues to have discussions with AMIT regarding resolution of this
issue. No agreement has been reached with AMIT at this time.
MAE GP, an affiliate of the Managing General Partner, owns 1,675,113 Class B
Shares of AMIT. MAE GP has the option to convert these Class B Shares, in whole
or in part, into Class A Shares on the basis of 1 Class A Share for every 49
Class B Shares. These Class B Shares entitle MAE GP to receive 1% of the
distributions of net cash distributed by AMIT. These Class B Shares also
entitle MAE GP to vote on the same basis as Class A Shares which allows MAE GP
to vote approximately 37% of the total shares (unless and until converted to
Class A Shares at which time the percentage of the vote controlled represented
by the shares held by MAE GP would approximate 1% of the vote). Between the date
of acquisition of these shares (November 24, 1992) and March 31, 1995, MAE GP
declined to vote these shares. Since that date, MAE GP voted its shares at the
1995 annual meeting in connection with the election of trustees and other
matters. MAE GP has not exerted and continues to decline to exert any
management control over or participate in the management of AMIT. MAE GP may
choose to vote these shares as it deems appropriate in the future.
As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT
an option to acquire the Class B Shares owned by it. This option can be
exercised at the end of 10 years or when all loans made by AMIT to partnerships
affiliated with MAE GP as of November 9, 1994, (which is the date of execution
of a definitive Settlement Agreement), have been paid in full, but in no event
prior to November 9, 1997. AMIT delivered to MAE GP cash in the sum of
$250,000 at closing, which occurred on April 14, 1995, as payment for the
option. Upon exercise of the option, AMIT will remit to MAE GP an additional
$94,000.
Simultaneously with the execution of the option, MAE GP executed an
irrevocable proxy in favor of AMIT the result of which is MAE GP will be able
to vote the Class B Shares on all matters except those involving transactions
between AMIT and MAE GP affiliated borrowers or the election of any MAE GP
affiliate as an officer or trustee of AMIT. On these matters, MAE GP granted
to the AMIT trustees, in their capacity as trustees of AMIT, proxies with
regard to the Class B Shares instructing such trustees to vote said Class B
Shares in accordance with the vote of the majority of the Class A Shares voting
to be determined without consideration of the votes of "Excess Class A Shares"
as defined in Section 6.13 of the Declaration of Trust of AMIT.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
10.13 Purchase Agreement - Building 47 of the Dayton Industrial Complex -
between the Partnership and Miller-Valentine Partners, dated March
20, 1995, incorporated by reference to Form 8-K dated August 31,
1995.
10.14 Amendment to and Assignment of Purchase Agreement - Building 47 of
the Dayton Industrial Complex - between the Partnership, Miller-
Valentine Partners and Mid-States Development Company, dated April
27, 1995, incorporated by reference to Form 8-K dated August 31,
1995.
10.15 Amendment to Purchase Agreement - Building 47 of the Dayton
Industrial Complex - between the Partnership and Mid-States
Development Company, dated June 15, 1995, incorporated by
reference to Form 8-K dated August 31, 1995.
10.16 Third Amendment to Purchase Agreement - Building 47 of the Dayton
Industrial Complex - between the Partnership and Mid-States
Development Company, dated July 19, 1995, incorporated by
reference to Form 8-K dated August 31, 1995.
10.17 Assignment of Permits, Etc. - Building 47 of the Dayton Industrial
Complex - between the Partnership and Mid-States Development
Company, dated August 22, 1995, incorporated by reference to Form
8-K dated August 31, 1995.
10.18 Assignment and Assumption of Leases and Security Deposits - Building
47 of the Dayton Industrial Complex - between the Partnership and
Mid-States Development Company, dated August 22, 1995, incorporated
by reference to Form 8-K dated August 31, 1995.
10.19 Assignment of Warranties - Building 47 of the Dayton Industrial
Complex - between the Partnership and Mid-States Development
Company, dated August 22, 1995, incorporated by reference to Form
8-K dated August 31, 1995.
10.20 Bill of Sale and Assignment - Building 47 of the Dayton Industrial
Complex - between the Partnership and Mid-States Development
Company, dated August 22, 1995, incorporated by reference to Form
8-K dated August 31, 1995.
10.21 Limited Warranty Deed - Building 47 of the Dayton Industrial Complex
- between the Partnership and Mid-States Development Company, dated
August 22, 1995, incorporated by reference to Form 8-K dated August
31,1995.
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K:
A Form 8-K dated August 31, 1995 was filed reporting the sale of
Building 47 of the Dayton Industrial Complex, located at 3920 Space
Drive, Vandalia, Ohio, 45377.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
ANGELES PARTNERS XIV
By: Angeles Realty Corporation II
Managing General Partner
By: /s/Carroll D. Vinson
Carroll D. Vinson
President
By: /s/Robert D. Long, Jr.
Robert D. Long, Jr.
Controller and Principal Accounting Officer
Date: November 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners XIV 1995 Third Quarter 10-QSB and is qualified in its entirety by
reference to such filing.
</LEGEND>
<CIK> 0000759859
<NAME> ANGELES PARTNERS XIV
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 315,791
<SECURITIES> 0
<RECEIVABLES> 28,692
<ALLOWANCES> 42,383
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 52,874,612
<DEPRECIATION> 26,300,395
<TOTAL-ASSETS> 28,610,042
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 48,219,514
<COMMON> 0
0
0
<OTHER-SE> (24,704,758)
<TOTAL-LIABILITY-AND-EQUITY> 28,610,042
<SALES> 0
<TOTAL-REVENUES> 6,136,875
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,221,806
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,488,614
<INCOME-PRETAX> (3,006,853)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,006,853)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,006,853)
<EPS-PRIMARY> (67.44)
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
</FN>
</TABLE>
