SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
September 16, 1994
California Seven Associates Limited Partnership,
a California Limited Partnership
(Exact name of registrant as specified in its charter)
California 0-14581 94-2970056
(State of Organization) (Commission (IRS Employer
File Number) Identification No.)
900 Cottage Grove Road, South Building
Bloomfield, Connecticut 06002
(Address of principal executive offices) (Zip Code)
(203) 726-6000
(Registrant's telephone number, including area code)
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California Seven Associates Limited Partnership,
a California Limited Partnership
ITEM 3. (a) Bankruptcy
On September 16, 1994, California Seven Associates Limited
Partnership, a California Limited Partnership ("the Partnership"),
filed a voluntary petition for reorganization under Chapter 11 of
the United States Bankruptcy Code. The petition was filed at the
United States Bankruptcy Court, Central District of California,
Santa Ana Division (Case No. SA 94-19491 JR). The Partnership is
operating as Debtor in Possession pursuant to Chapter 11, United
States Code, Sections 1107 and 1108.
The letter to investors providing the announcement is filed as an
exhibit hereto and is incorporated herein by reference.
ITEM 7(C).
Exhibits
(20) Investor letter issued September 16, 1994.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
California Seven Associates Limited
Partnership,
a California Limited Partnership
By: CIGNA Realty Resources, Inc. - Seventh,
General Partner
Date: September 30, 1994 By: /s/ John D. Carey
John D. Carey, President and Controller
(Principal Executive Officer)
(Principal Accounting Officer)
<PAGE>
FORM 8-K
California Seven Associates Limited Partnership,
a California Limited Partnership
EXHIBIT INDEX
Exhibit
Number
20.1 Investor letter issued September 16, 1994.
<PAGE>
September 16, 1994
Dear Limited Partner:
The purpose of this letter is to bring you up-to-date on the
situation surrounding California Seven Associates Limited
Partnership, "the Partnership". As you know, the Partnership has
been impacted by weak economic conditions which have led to
depressed results, and as a result, cash reserves have been reduced
to very low levels. In addition, the loss of Sherman Oaks during
the January earthquake has led to further strains on cash
management and reserve levels. In an effort to maintain minimum
cash reserves, we ceased payments on the second mortgage beginning
November 1, 1993. Even with withholding payment on the second
mortgage, the Partnership faces current cash requirements which may
not be covered by current cash reserves coupled with cash flow from
continuing operations.
Travelers, our first mortgage lender, has still not informed us of
their decision as to whether to repair/rebuild the Sherman Oaks
property. Should Travelers ultimately decide to repair/rebuild the
Sherman Oaks property, we will be faced with satisfying a 5%
deductible. Travelers may pursue its option to apply net insurance
proceeds representative of cash value to the balance of the first
mortgage. Remaining property operations will not support continued
debt service should Travelers decide not to rebuild and apply net
insurance proceeds to the balance of the mortgage. In addition,
Travelers has asserted that they should have control over the
proceeds from our business interruption insurance. As we
previously reported, we submitted a claim for business interruption
insurance to our insurance company in July for approximately
$1,215,000. As a result of Travelers' assertion of control over
these proceeds, this claim is still pending. Assuming the
Partnership survives a resolution of the Sherman Oaks situation,
the Partnership still faces debt maturity in May of 1995.
The Partnership's current cash position has allowed payment of
normal monthly recurring operating expenses, Travelers first
mortgage monthly debt service of $716,667 and little to no capital
improvements. In the short term, the Partnership is facing re-
establishing reserves of approximately $440,000 for tenant security
deposits, payment of property insurance of approximately $360,000
by October 1994 and payment of property taxes of at least $590,000,
exclusive of Sherman Oaks, by December 10, 1994.
Over the last two years, the Partnership has made three formal
attempts and has participated in numerous informal discussions on
debt modifications with Travelers. Travelers has been unwilling to
accept any terms which would not enhance their existing position.
Additionally, in the past year we have pursued non-traditional
opportunities to refinance the Partnership's debt which have been
unsuccessful due to loan to value constraints and questions about
debt service coverage. The impending cash shortage, coupled with
the Sherman Oaks situation and the lack of debt modification or
refinance alternatives, has forced the Partnership to seek the
protection of the courts or face foreclosure of the properties.
Today, the Partnership filed a voluntary petition for
reorganization under Chapter 11 of the United States Bankruptcy
Code. The filing represents the only opportunity to retain
investors' interests in the Partnership and allow any possibility
for potential future value for investors. The filing is the only
available alternative to avoid a foreclosure while allowing the
Partnership the time and resources to rebuild Sherman Oaks.
Additionally, a reorganization may allow an extension of the life
of the Partnership which could coincide with a recovery in the
California market.
The Partnership has begun formulating the basis for a plan of
reorganization which we expect to submit to the court within a
relatively short period of time. Many factors are needed to
formulate a successful plan. It is premature to speculate on the
outcome at this time. It is our hope that the Partnership will be
allowed to reorganize with a plan that provides for repayment to
the creditors while allowing the partners to retain their
interests. If a plan is not confirmed, the Partnership may cease
to own the properties.
In the meantime, the Partnership's properties will continue to
operate as usual. We will keep you informed of developments as
they occur. If you have any questions, please contact your
registered representative or our Investor Relations unit at 1-800-
255-5876. We also welcome written inquiries which may be sent to
CIGNA Financial Partners, Inc., Cal-7, S-313, 900 Cottage Grove
Road, Hartford, CT 06152-2313.
Sincerely,
John D. Carey
President
CIGNA Realty Resources, Inc. --Seventh, General Partner
California Seven Associates Limited Partnership
